Skill: diagnostikon/polymarket-24h-price-curve-arb-trader (version 0.0.3)

--- name: polymarket-24h-price-curve-arb-trader description: Trades structural mispricings in crypto price-threshold markets by reconstructing the implied probability distribution curve across multiple strike levels and detecting mathematical violations such as monotonicity breaks and range-sum inconsistencies. metadata: author: Diagnostikon owner: Diagnostikon version: "1.0.0" displayName: 24h Price Curve Arbitrage Trader difficulty: advanced --- # 24h Price Curve Arbitrage Trader > **This is a template.** > The default signal is implied-CDF violation detection across crypto price-threshold markets — remix it with additional assets, curve-fitting models, or cross-venue price feeds. > The skill handles all the plumbing (market discovery, curve construction, trade execution, safeguards). Your agent provides the alpha. ## Strategy Overview Polymarket lists dozens of price-threshold markets for the same asset and date: - "Will BTC be above $64,000 on March 27?" - "Will BTC be above $68,000 on March 27?" - "Will BTC be between $68,000 and $70,000 on March 27?" - "Will BTC be above $70,000 on March 27?" Retail trades each market as an isolated bet. But together, these markets form an **implied probability distribution curve** — a CDF of where the market thinks the price will be. This skill reconstructs that curve and finds where it is **mathematically broken**. ## The Edge: Butterfly Arbitrage for Prediction Markets In options markets, quant traders analyze the implied volatility surface across strikes to find mispriced options. This is the prediction market equivalent. ### Violation Type 1: Monotonicity Break The probability of being above a lower price must always be greater than or equal to being above a higher price: ``` P(BTC > $68k) >= P(BTC > $70k) >= P(BTC > $74k) ``` If a higher strike is priced above a lower strike, the curve is broken. ### Violation Type 2: Range-Sum Inconsistency A "between" market's price must equal the difference of two "above" markets: ``` P($68k < BTC < $70k) == P(BTC > $68k) - P(BTC > $70k) ``` If the market prices the range at 54% but the above-markets imply 48%, that's 6% of mathematical arbitrage. ## Why This Works 1. **Retail trades in silos** — most users view each market independently and don't cross-reference the full strike ladder 2. **No options infrastructure** — unlike traditional markets, there's no market maker maintaining curve consistency across strikes 3. **Mathematical, not opinion** — the violations are provable inconsistencies, not subjective edge calls 4. **High volume** — BTC price markets are the most actively traded category on Polymarket ## Signal Logic 1. Discover all crypto price-threshold markets via keyword search 2. Parse each question: extract asset (BTC/ETH), strike price(s), date, and type (above/between/dip) 3. Group into curves by (asset, date) 4. For each curve with 2+ points: - Check monotonicity across "above" markets - Check range-sum consistency for "between" markets 5. Rank violations by magnitude 6. Trade only violations that also pass threshold gates (`YES_THRESHOLD` / `NO_THRESHOLD`) 7. Size by conviction (violation magnitude), not flat amount ## Safety & Execution Mode **The skill defaults to paper trading (`venue="sim"`). Real trades only with `--live` flag.** | Scenario | Mode | Financial risk | |---|---|---| | `python trader.py` | Paper (sim) | None | | Cron / automaton | Paper (sim) | None | | `python trader.py --live` | Live (polymarket) | Real USDC | `autostart: false` and `cron: null` mean nothing runs automatically until configured in Simmer UI. ## Required Credentials | Variable | Required | Notes | |---|---|---| | `SIMMER_API_KEY` | Yes | Trading authority. Treat as a high-value credential. | ## Tunables (Risk Parameters) All declared as `tunables` in `clawhub.json` and adjustable from the Simmer UI. | Variable | Default | Purpose | |---|---|---| | `SIMMER_MAX_POSITION` | `40` | Max USDC per trade at full conviction | | `SIMMER_MIN_TRADE` | `5` | Floor for any trade | | `SIMMER_MIN_VOLUME` | `5000` | Min market volume filter (USD) | | `SIMMER_MAX_SPREAD` | `0.08` | Max bid-ask spread | | `SIMMER_MIN_DAYS` | `0` | Min days until resolution (0 = allow same-day) | | `SIMMER_MAX_POSITIONS` | `8` | Max concurrent open positions | | `SIMMER_YES_THRESHOLD` | `0.38` | Buy YES only if market probability <= this | | `SIMMER_NO_THRESHOLD` | `0.62` | Sell NO only if market probability >= this | | `SIMMER_MIN_VIOLATION` | `0.04` | Min curve violation magnitude to trigger a trade | ## Edge Thesis Traditional options markets have market makers who enforce curve consistency (no-arbitrage pricing). Polymarket has no such mechanism — each market is priced by its own order book with its own liquidity pool. This creates systematic micro-inconsistencies in the implied distribution, especially when: - New markets are created at previously unlisted strikes - Large directional flow pushes one strike without propagating to neighbors - Market makers leave gaps during low-liquidity hours This skill treats the strike ladder as a probability lattice and trades the repair. ## Dependency `simmer-sdk` by Simmer Markets (SpartanLabsXyz) - PyPI: https://pypi.org/project/simmer-sdk/ - GitHub: https://github.com/SpartanLabsXyz/simmer-sdk


Security scan verdicts — ClawScan: clean | static analysis: clean | VirusTotal: clean | SkillSpector: clean (LOW)