Strategies on Polymarket. Part 1
Wanted to fit the topic into one post, but the number of illustrations needed to understand it is clearly more than one image that fits into a standard Telegram post. I prepared an article—get comfortable and let’s go.
What will you find in this article?
In this article, I explain how to decode other traders’ strategies, evaluate the performance and stability of their trades. We will look at the performance of profitable and unprofitable traders on Polymarket, and I’ll also share links to some services and trader profiles mentioned in the article.
The article was written in partnership between Shtanga and Moni. Each of us contributed our experience and expertise to make the final result even stronger. The article is presented in several parts:
- Part 1. 12 Working Strategies on Polymarket
- Part 2. Rules of Entering a Trade on Polymarket
- Part 3. Tools and Methods for Analyzing Traders
- Part 4. Breakdown of Profitable Traders’ Deals
We decided to start specifically with strategies. Later, for those who need more information and tools, you’ll find them in the next parts.
In this part, we present some strategies we discovered, as well as ones we already knew ourselves. Below are 12 working setups used by experienced traders—and by us as well. I’ve supplemented them with examples, entry and exit rules, and risk management recommendations. Let’s go.
12 Working Strategies on Polymarket
Polymarket is not only a place for betting on elections and sports, but also a platform where you can build complex trading strategies on cryptocurrencies.
Before moving on to strategies, it’s important to understand the concept of time decay. You can read more in the material where we explained the delta-neutral approach.
Briefly: profit in delta-neutral trades on Polymarket arises due to the time decay of bets. Over time, scenarios converge to a single outcome: winner = 100%, the rest = 0%. And if we take the right side, the value of our bet grows simply because the event’s expiration is approaching.
1. Bet on Low Volatility
Description:
We buy two “No” outcomes in range markets—on the event “price not below X” and on “price not above Y.” This creates a concentrated bet that the price will remain between X and Y.
How to profit:
Both bets win if the price at expiration is inside the chosen range.
- Fix profits early when bet prices grow due to time decay, realizing 10–40% (depending on risk appetite).
- If expiration is near and price is in range—hold until the end.
Example:
ETH $4550, ranges $4100–5000. We take:
- No on “ETH ≥ 4100” (0.88)
- No on “ETH ≤ 5000” (0.89)
If price closes between $4100 and $5000—both positions win. If price moves up or down, one rises, the other falls. Exit near breakeven once delta-neutrality is lost.
2. Bet on High Volatility
Description:
We buy No on a range that includes the current price. Any move up or down breaks the range—the bet wins.
How to profit:
If the price leaves the range in either direction.
Example:
SOL $175, range $170–180. No on this range at 0.66 (as of August 12). Price moved, bet closed +50% in a couple of days.
3. YES–YES–YES on Multiple Ranges
Description:
We buy Yes on several adjacent ranges around the current price.
How to profit:
At expiration, price must land in at least one chosen range.
Example:
ETH $4600, ranges all above $4100:
If price closes in one range, bet pays off. 10% move margin, 3 days to close. Total cost 0.9—yield 10% in 3 days.
4. YES–NO with Hedge
Description:
Combination of directional bet and insurance contract in the opposite direction.
How to profit:
If main forecast is correct—profit exceeds hedge loss.
Example:
Expect BTC to $130k before dropping to $100k:
- Yes “BTC 130k” (0.69)
- Yes “BTC 100k” (0.25)
If price drops to $100k, hedge covers losses of main deal.
5. ABOVE/BELOW with Hedge
Description:
Take Yes on “above X” and hedge short as insurance. Classic bet.
How to profit:
Bet wins in low volatility if gain from bet > hedge loss (sometimes hedge can profit too).
Example:
ETH $4500. Yes “ETH ≥ 4400” (0.72), hedge short with TP at 4400. 18h to expiration. If price stays 4400–4600, profit.
6. Bet + Option
Description:
Combination of Polymarket bets and exchange options (Deribit, OKX) with same expiration. Bet on expected outcome, option in opposite direction as hedge. Profit forms if bet wins while option either expires worthless or loses less than the win.
- Polymarket bet wins.
- Opposite option loses less or expires worthless.
- Net profit = bet win − option cost.
Main difficulty—high option costs, and extreme volatility periods are short, making position setup tricky.
7. Cross-Market Arbitrage
Description:
Buy cheap outcome on one market, sell expensive on another.
Example:
Yes on Polymarket = $0.40, same outcome on Kalshi = $0.50 → sell on Kalshi, buy on Polymarket equal volume. Cost $0.90 each share, at expiration always $1 regardless.
Such trades appear across platforms. Example: Fed July decision spread between Polymarket and Limitless.
Almost risk-free, often no need to wait until expiration—exit once spread narrows.
8. Market Making
Description:
Place limit orders on both sides, profit from spread.
Example:
BTC $60–65k range. Buy No at 0.40, sell at 0.45 repeatedly.
One trader made $25k with this. Choosing the right markets is key.
9. Laddering
Description:
Gradually open positions at different price levels.
10. “News” Strategy
Description:
Quick bet right after news release, before price adjusts.
Example:
Pick geopolitics markets—wait for news and open trade.
11. Carry Trade on Premium
Description:
Buy outcome in long-term event, resell when price rises due to time decay. Literally buying events and holding until expiration.
- When outcome is almost certain (>90%), but payout not yet.
- When liquidity exists, and bet price steadily trends toward $1.
Example:
Yes “BTC ≥ 1M before year end.”
12. Providing Liquidity for Incentives
Description:
Provide capital in Polymarket order books (or other platforms) to earn commissions and platform rewards (tokens, USDC, NFTs).
- When platform launches LP reward program.
- High enough rewards.
- Low LP competition.
- Long enough until expiration + low volatility.
Example:
Polymarket gives incentives, but competition and liquidity reduce profitability. Polymarket rewards
Limitless gives similar rewards, but far lower liquidity → strategy works better there.
Conclusions
Analyzing various strategies on Polymarket shows that even with limited liquidity and high volatility, it’s possible to find stable entry points and build bet combinations with asymmetric risk. Greatest potential lies in approaches combining bets with hedging via futures or options—but these are more complex than pure betting strategies.
The key to results is not only the trade idea, but also execution: fixing profit on time decay, timely take-profits, smart stop usage, and flexible risk management. That’s why in the next parts we’ll look at entry/exit rules and analyze profitable traders’ experience on Polymarket to show the mechanics of trades through professionals’ eyes.
Polymarket offers wide opportunities—from speculative trading and arbitrage to passive income via liquidity provision. But long-term success comes only through discipline, systematic approach, and careful probability analysis.
We gathered practices that really work in the market and supplemented them with examples from our own experience. We hope this material helps you look at Polymarket trading in a new way and use it not just for speculation but for building balanced strategies.
To be continued in the next part…
