polymarket resolution outlier long
What it checks
When a Polymarket resolves sharply opposite to its long-run consensus, the linked stock tends to drift in the direction of the surprise for 1-3 weeks.
Mechanism
When a Polymarket resolves sharply opposite to its lifetime volume-weighted consensus (terminal-window avg >70% vs lifetime VWAP <30%, or symmetric), the resolution is a SURPRISE - the equity linked to the YES outcome experiences post-resolution drift in the direction of the surprise.
Signal rule
If terminal-5-day avg >=0.70 AND lifetime VWAP <=0.30 -> LONG ticker_link 5/10/20d. Symmetric case -> SHORT. T+1 lag, 3-day event window.
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
- 100-300 bps over 5-20d (modeled)
- Paper window
- T+1 to T+20d
Wolfers-Zitzewitz / Berg-Nelson-Rietz surprise-resolution drift; internal target 100-300 bps over 5-20d.
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 resolution driftEvent-drivenIn 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.
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.
polymarket iv skew spreadEvent-drivenPrediction-market YES probability vs equity-option-implied probability of the same binary event. When |P_polymarket − P_option_implied| > threshold and the equity has an options chain, take the cheaper-side equity position. Distinct from #206 polymarket_event_premium which compares against realized vol (0.5 baseline); this is the true Moonshot-C cross-instrument arb.
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