Anatomy of Polymarket Intra-Candle Arbitrage
By Quantitative Engineering Team • Published September 2026
The Inefficiency in 15-Minute Binary Markets
Every 15 minutes, Polymarket opens high-volume binary prediction markets asking whether Bitcoin or Ethereum will close above or below the strike price at the end of the candle.
Because retail orderflow is driven by emotional reaction to sudden 1-minute price surges, orderbooks experience momentary supply/demand imbalances. When Bitcoin drops $200 in 30 seconds, panic selling drives Up shares down to 42¢. When price recovers moments later, panic buying pushes Down shares down to 53¢.
The Complete-Set Arbitrage Mathematical Proof
Let $C_{Up}$ be the purchase price of an Up share, and $C_{Down}$ be the purchase price of a Down share.
Condition for Positive Edge: C_{Up} + C_{Down} < $1.00
If $C_{Up} = 0.42$ and $C_{Down} = 0.53$, then $C_{Up} + C_{Down} = 0.95$. Regardless of whether the market resolves Up or Down, the contract payoff is $1.00, securing a +5.26% return per complete pair.
Automated Contract Redemption
Upon candle resolution, our software automatically dispatches a redemption call to the Polygon Conditional Token Framework (CTF) contract, burning the paired shares and crediting your wallet with pure USDC.