Cross-platform prediction market arbitrage is more crowded than it was a year ago, but this week’s scan still surfaces three genuine mispricings between Kalshi and Polymarket worth a closer look. The widest gap is in November Fed policy contracts, where Kalshi’s “rate cut in November” market is trading at 63 cents while the equivalent Polymarket contract sits at 68 cents. That five-point spread, net of fees and slippage, offers roughly a 3.1% risk-free return for traders willing to lock capital for six weeks.
Below, we walk through the three cleanest opportunities on the board as of Tuesday morning, plus one setup that looks like arbitrage but is actually contract-definition risk in disguise.
Fed November Rate Cut: The 5-Point Spread
The FOMC meets November 4-5, and prediction markets are pricing in a rate cut with high confidence. But the two largest US-facing venues disagree meaningfully on the exact probability.
- Kalshi (FED-25NOV-CUT): 63% implied probability, $0.63 YES
- Polymarket (November Fed Decision): 68% implied probability, $0.68 YES
A trader who buys YES on Kalshi at $0.63 and sells YES on Polymarket at $0.68 locks in a $0.05 gross spread per contract pair, regardless of the actual Fed decision. After Kalshi’s exchange fees (roughly 1-2% of the trade value on this size) and Polymarket’s gas costs, the net edge is around 3.1% over the six-week hold. That’s a low-double-digit annualized return on capital that requires no directional view.
The catch, as always, is contract-definition parity. We reviewed both settlement rules: Kalshi settles on the target range change announced in the FOMC statement, and Polymarket settles on the same statement’s language. These are functionally identical for this cycle. The spread appears to reflect the retail flow imbalance between the two venues rather than any structural difference.
2026 Senate Control: A Narrower But Cleaner Gap
With five weeks until the midterm election, Senate control markets are seeing heavy volume on both sides. The current state of play:
- Kalshi “Democrats win Senate majority”: 41% ($0.41 YES)
- Polymarket “Democrats control Senate after 2026 election”: 44% ($0.44 YES)
The three-point gap is tighter than the Fed spread, but the settlement clarity is higher: both contracts resolve on the same underlying question and on the same date. A pairs trade here yields roughly 1.8% net edge over five weeks. Volume on both sides is sufficient to move meaningful size, with Polymarket showing $8.2 million in 24-hour turnover on the contract and Kalshi reporting $3.4 million.
Bitcoin Year-End Strike Ladders: The Widest Absolute Spread
The most eye-catching mispricing this week sits in the Bitcoin end-of-year price contracts. Both venues offer strike ladders on “BTC above $X by December 31,” and the mid-strike bands are showing unusual divergence:
| Strike | Kalshi YES | Polymarket YES | Spread |
|---|---|---|---|
| BTC > $110,000 | $0.72 | $0.75 | 3 pts |
| BTC > $120,000 | $0.48 | $0.54 | 6 pts |
| BTC > $130,000 | $0.29 | $0.36 | 7 pts |
| BTC > $140,000 | $0.16 | $0.21 | 5 pts |
The seven-point spread on the $130,000 strike is the largest single-contract gap we’ve tracked in a major-liquidity market this quarter. Part of the divergence is real: Polymarket’s contracts settle on Coinbase’s spot price at 4pm UTC on December 31, while Kalshi uses a volume-weighted composite. But the modeled settlement difference explains at most one point of the spread, leaving five to six points of potential edge before fees.
The False Arbitrage: Election Turnout Contracts
One setup that looks tempting but isn’t: 2026 midterm turnout contracts. Kalshi shows “Total turnout above 115 million” at 58%, while Polymarket’s “midterm turnout over 115M” trades at 51%. A seven-point gap in either direction would normally scream arbitrage.
It isn’t. The two contracts use different data sources for settlement (Kalshi uses the FEC final report, Polymarket uses AP’s tallies from state-level filings), and historically these sources have differed by two to four million votes. On a contract with a 115 million threshold, that data-source risk swamps the apparent spread. Sharp traders are staying out of this one.
Where to Trade
Both platforms remain the best options for executing these strategies at scale. Kalshi offers the deepest liquidity on US-regulated event contracts and is the venue of choice for institutional-size Fed and macro trades. Open a Kalshi account through PredictWire to get started.
Polymarket’s on-chain order book gives traders access to the widest range of contracts globally, and its crypto-native structure is particularly well-suited for BTC and ETH price bands. Sign up for Polymarket here.
For a full comparison of trading fees, contract selection, and settlement mechanics across the top venues, see our 2026 Prediction Market Rankings. The rankings update weekly as venue liquidity and contract offerings shift.
Arbitrage windows in prediction markets close quickly. The spreads cited above were captured Tuesday morning; retail flow, whale positioning, and news catalysts can compress a five-point gap to zero within hours. Trade with limit orders, size appropriately, and always confirm settlement language before entering a pairs position.