Understanding Arbitrage in Predexy

Discover how Predexy detects, scores, and classifies cross-platform price discrepancies — and what each opportunity field tells you before you act.

When the same prediction market outcome trades at different prices on different platforms, you can theoretically buy where the price is low and sell where it is high, locking in a risk-free profit. Predexy continuously scans all seven integrated platforms and surfaces these discrepancies as structured, scored opportunities — giving you the intelligence to act, without executing any trades on your behalf.

Predexy is a market intelligence tool. It identifies and scores potential arbitrage opportunities but does not execute trades, manage positions, or move any funds. All execution decisions and actions are entirely your responsibility.

Two types of arbitrage

Predexy detects two structural patterns:

Direct arbitrage (direct) — The same Yes outcome is priced differently on two platforms. You buy Yes where it is cheap and sell Yes where it is expensive.

Dutch-book arbitrage (dutch_book) — You buy Yes on one platform and No on another, and the combined cost of both is less than $1.00. Because one of them must resolve to$1.00, you are guaranteed a profit if both positions fill.

The type field on every ArbitrageOpportunity object is either direct or dutch_book.

How opportunities are scored

Each opportunity receives an arbitrage_score between 0 and 100. The score combines three dimensions:

• Execution quality — spread magnitude, net profit after fees, fee efficiency across both legs
• Market quality — liquidity depth and 24-hour trading volume on both sides
• Temporal quality — time remaining until market expiry (longer runways score higher)

The score is designed to rank practically useful opportunities above ones that look attractive on paper but are undermined by thin liquidity, high fees, or imminent expiry.

Use min_score when querying the opportunities endpoint to filter out low-quality signals before they reach your workflow. The default is 40 (informational and above).

Classifications

Based on the score and supporting conditions, every opportunity is assigned a classification:

Classification	Score	Additional conditions
actionable	≥ 70	Positive net spread, combined liquidity > $500
informational	40–69	Below score threshold or low liquidity
noise	< 40	Not recommended for further review

Lifecycle states

Opportunities are not deleted when they age — they move through a state machine so you always know whether a signal is fresh, fading, or historical:

Status	Meaning
active	Recently re-observed in the latest scan cycle
stale	Missed one or more scan cycles; treat with caution
resolved	Hard-expired or missed the maximum consecutive miss threshold

The consecutive_misses counter tells you how many scan cycles have passed since the opportunity was last confirmed. Use stale_after_at and expire_after_at as the soft and hard lifecycle boundaries.

Key fields

The ArbitrageOpportunity object carries all the data you need to evaluate a signal:

Field	Type	Description
type	direct | dutch_book	Arbitrage strategy detected
buy_price	number (0–1)	Price to buy the outcome on buy_platform
sell_price	number (0–1)	Price to sell the outcome on sell_platform
net_spread	number	Raw spread minus platform fees
estimated_profit	number	Estimated profit per $100 deployed
annualized_return	number	Return annualized based on time to expiry
arbitrage_score	integer (0–100)	Multi-factor quality score
classification	string	actionable, informational, or noise
status	string	active, stale, or resolved
risk_gate_state	string	allowed, degraded, or blocked
fees.buy_fee	number	Fee fraction on the buy leg (e.g. 0.02 = 2%)
fees.sell_fee	number	Fee fraction on the sell leg
fees.total_fees	number	Combined round-trip fee fraction

Risk gate states

The risk_gate_state field reflects Predexy’s runtime assessment of whether an opportunity should be acted upon:

State	Meaning
allowed	No runtime flags; opportunity passes all checks
degraded	Data quality or platform-level concerns; proceed with extra caution
blocked	Opportunity is suppressed; do not act

When risk_gate_state is degraded or blocked, the risk_gate_reason field provides a machine-readable explanation.

Example opportunity object

{
  "id": "arb_poly_limit_abc123",
  "question_title": "Will BTC reach $100k by 2026?",
  "type": "direct",
  "buy_platform": { "slug": "limitless", "name": "Limitless" },
  "sell_platform": { "slug": "polymarket", "name": "Polymarket" },
  "buy_price": 0.42,
  "sell_price": 0.48,
  "spread": 0.06,
  "spread_bps": 600,
  "net_spread": 0.02,
  "estimated_profit": 2.00,
  "annualized_return": 24.5,
  "arbitrage_score": 78,
  "classification": "actionable",
  "status": "active",
  "risk_gate_state": "allowed",
  "fees": {
    "buy_fee": 0.02,
    "sell_fee": 0.02,
    "total_fees": 0.04
  }
}