polymarket executive departure short
What it checks
When Polymarket says it's more likely than not that the CEO will leave by date Y, short the stock through resolution. Markets price in the imminent-departure premium before it happens.
Mechanism
When a polymarket on 'Will <CEO/CFO/Exec> leave <company> before <date>' has YES probability > 0.5, the underlying equity tends to under-perform through the resolution window. Two channels: (1) information asymmetry — prediction-market participants may have read-through that the sell-side hasn't priced; (2) imminent-event risk premium — once YES exceeds 50%, the equity trades at a discount even if the departure ultimately doesn't happen.
Signal rule
yes_lag ≥ 0.50 → SHORT through resolution_date (capped 60d). Hold 5/30/60d. T+1 lag.
Data dependencies
daily_pricesAdjusted-close OHLCV for every US-listed ticker; primary price feed.
polymarket_marketsWorker data table — see services/worker schema.
polymarket_prices_dailyWorker data table — see services/worker schema.
Expected edge
- Paper alpha
- untested — moonshot
- Paper window
- T+0 to T+60d
Untested — moonshot. Target -100 to -300 bps on tickers with an exec-departure polymarket above 50%.
Example tickers where this is likely to fire
Illustrative only — the signal fires based on the live data, not a fixed list.
Related families
polymarket event premiumEvent-drivenPrediction-market prices on company-specific binary events (FDA approvals, M&A close-by-date, CEO departures, earnings beats, bankruptcy, lawsuit outcomes) update faster and more accurately than equity options price the same outcome. When the polymarket yes_price deviates from the option-implied probability of the same outcome by more than threshold, the equity has not yet absorbed the news.
item 502 executive departureEvent8-K Item 5.02 (Departure/Appointment of Officers). Fee et al find ~-3% abnormal return on the 8-K filing window, holding through 60d. Forced departures stronger (-5% to -15%).
polymarket ma close driftEvent-drivenFor merger/acquisition markets ("Will X merger close by date Y?"), the polymarket YES probability is a clean prior on deal-completion. When the polymarket says >75% close-prob but the equity is trading far below the deal price (wide deal-spread), the classical Mitchell-Pulvino risk-arb edge is amplified: there's a paid wait AND a prediction-market vote of confidence on completion. Symmetric short on <25% close-prob (break risk).
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