Polymarket Resolution Drift
In plain terms
In the last 5 days before a polymarket resolves, the YES price often overshoots its all-time fair value. We mean-revert: short when overshot up, long when overshot down.
How it works
In the last ~5 trading days before a polymarket resolves, the YES price becomes noisy — microstructure flows, low liquidity, and asymmetric information distort the price. Extreme reads in the terminal window MEAN-REVERT to the lifetime volume-weighted fair value, NOT to the eventual outcome. The equity then follows the prediction-market direction.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Polymarket markets
A data feed this strategy reads, refreshed on its normal schedule.
- Polymarket prices daily
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- untested — moonshot
- Tested over
- T-5 to T+5 around resolution
Untested — moonshot. Target 50-150 bps per qualifying terminal-window fire; ~10-30 fires per linked ticker per year.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Prediction markets (Polymarket / Kalshi / Manifold) often price corporate events — FDA approvals, M&A close-by dates, CEO departures — faster than the stock does. When the prediction-market 'yes' price diverges from 0.5 by more than 5%, take a directional position in the linked equity.
When prediction markets disagree with options markets on the same event, the cheaper side has the edge. We take the equity position implied by whichever instrument is mispriced lower.
Polymarket asks 'will the merger close on time?' — if YES is above 75% but the stock is still trading far below the deal price, take the long. Symmetric short when YES drops below 25%.
Explore Polymarket Resolution Drift on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.