def polymarket_analyzer( current_q, # [q_yes, q_no] b, # liquidity parameter your_prob, # your YES probability estimate bankroll, # total bankroll in dollars kelly_fraction=0.25 # quarter-Kelly by default ): market_price = lmsr_price(current_q, b, 0) edge = your_prob - market_price print(f"Market price: {market_price:.4f}") print(f"Your estimate: {your_prob:.4f}") print(f"Raw edge: {edge:+.4f}") if abs(edge) < 0.03: print("\nEdge too small. No trade.") return # Kelly sizing if edge > 0: # buy YES b_payout = (1 / market_price) - 1 kelly = (your_prob * b_payout - (1 - your_prob)) / b_payout else: # buy NO no_price = 1 - market_price b_payout = (1 / no_price) - 1 kelly = ((1 - your_prob) * b_payout - your_prob) / b_payout position = bankroll * kelly * kelly_fraction direction = "YES" if edge > 0 else "NO" print(f"\nDirection: Buy {direction}") print(f"Full Kelly: {kelly:.2%} of bankroll") print(f"Quarter Kelly: {kelly * kelly_fraction:.2%} of bankroll") print(f"Position size: ${position:.2f}") # Check price impact shares = position / (market_price if edge > 0 else 1 - market_price) outcome = 0 if edge > 0 else 1 q_after = list(current_q) q_after[outcome] += shares new_price = lmsr_price(q_after, b, outcome) impact = abs(new_price - (market_price if edge > 0 else 1 - market_price)) print(f"\nPrice impact: {impact:.4f}") if impact > abs(edge) * 0.5: print("⚠️ WARNING: Impact eats >50% of your edge. Reduce size.") # Example: market at 35%, you think it's 55%, $10K bankroll polymarket_analyzer( current_q=[-20, 20], b=100, your_prob=0.55, bankroll=10000 )

The Math That Prints Money on Polymarket — And Why 93% of Traders Never Learn It

Subscribe to keep reading

Keep Reading

AlgoEdge Insights