Cross-Platform Arb Scanner

How the scanner works

The scanner fetches live markets from Kalshi and Polymarket every time you run it. It normalizes all prices to implied probability, then runs a fuzzy title-match algorithm (Jaccard similarity) to identify markets describing the same event on both platforms. Any pair with a match score above 15% gets scored for price divergence using symmetric KL divergence.

KL divergence measures how inconsistent two probability distributions are — not just the raw price gap. A 10¢ gap at 50/40 behaves very differently than a 10¢ gap at 90/80. KL captures this. Markets scoring above 0.15 get flagged as potential arb opportunities.

What to do when you see ARB FLAGGED

First: verify that both markets resolve on the same event, on the same date, with compatible terms. Kalshi and Polymarket sometimes phrase questions differently even when they're describing the same event. Second: check bid-ask spreads on both sides — a flagged arb with wide spreads may not be executable at the displayed midpoint. Third: check liquidity. If one side has thin order books, your fill price will differ from the displayed probability.

If all three checks pass, the trade is straightforward: buy YES on the cheaper platform and hedge on the more expensive one, or leg into both YES positions if the combined cost is under $1.00.