The Arb Math:
Guaranteed Profit or Guaranteed Loss?
Not all arbs are created equal. A 3¢ spread looks like profit — but after fees, it's often breakeven or negative. Here's exactly how to calculate whether an arb is worth taking.
How Cross-Platform Arb Works
When two platforms price the same event differently, you can buy both sides and guarantee profit regardless of outcome — as long as the combined cost of both sides is less than $1.00.
One side always pays $1.00. You spent 93¢. Gross profit: 7¢. Simple. But fees eat into that 7¢ — and whether anything is left over is the whole question.
Calculating Fees Correctly
Both platforms charge fees. You need to account for both before deciding if an arb is profitable.
Polymarket fees
Polymarket charges approximately 2% maker fee on the notional value of your order. On a $100 position: $2.00 fee.
Kalshi fees
Kalshi charges 7% of your profit on winning trades. This is more complex — it's not on notional, it's on the gain.
Real Examples — Good vs Bad Arbs
Example 1: Strong arb (take it)
Example 2: Marginal arb (skip it)
When to Skip an Arb
- Spread is under 3¢ — fees will eat the profit
- Liquidity is thin on one side — you can't fill at the displayed price
- Market closes in under 30 minutes — not enough time for both orders to fill
- The two market questions don't actually match — read them carefully
- One platform's price just spiked on breaking news — market is repricing, spread will close instantly
Scans every 3 min, calculates net profit after fees, alerts you only on real opportunities. 5¢+ spread default filter built in.