Prediction markets are purely PvP games. Every trade is two players thinking they are outsmarting each other: the seller believes the contract will be worth less, the buyer believes it will be worth more. You could say that’s true of all financial markets.

But here’s the difference: in prediction markets, the rules are dead simple. They’re spelled out for you in the resolution criteria. There is often not that much surprise in the resolution after following the market play out. Just a clear question with a clear outcome, which makes the direction of the market far more straightforward to read.

And just like in any PvP game, not every player approaches the game the same way.

Some come in clicking wildly, some play slow and calculated, and others bring in entire builds and scripts that give them a significant edge.

In prediction markets, you can think of traders in terms of levels

Levels of traders on PMs.

Level 1 Manual, vanilla trader.

The base level on PMs is evaluating prices of bets, whether they are overpriced or not, for the risk he is taking. You also have to seek good quality news and information that can later guide decision-making. This is highly time-consuming; you need to sit at the computer almost 100% of the time with no guarantee of results. Also, by constantly monitoring, you might lose patience and be more prone to greed, irregularities, and tiredness errors.

Level 2, Pragmatic, organized trader.

A Level 2 PM trader is less reliant on market orders. He evaluates the fair price and slowly builds his positions via the orderbook. He has more time for deep research and is less reliant on quick news. However, he still needs the bet to go his way to make a profit, which is uncertain. Also, his orders might not get filled, which can cause missed opportunities.

Level 3, Automated alpha gathering and trading

A Level 3 trader doesn't look at the price; he looks at whether or not a market can be automated. He researches ways to confirm the outcome and resolution criteria will be met, before everyone else. He knows that free APIs and WSS are his most precious allies. His only limits are his creativity and dev skills. By automating his trades, he completely avoids the traps that the lower levels fall into.

I aim to be Lvl 3. Many markets can be automated if you have enough imagination and development knowledge. In order to broaden your vision on how markets can be automated, we will study two concrete examples in the next sections.

Example 1 : Earthquakes

Take this Polymarket bet :

This market resolves to 'Yes' if an earthquake with a magnitude of 7.0 or above happens before Sep 30th. Its source of truth is the following site that publishes earthquakes with significant impact. And an earthquake with magnitude 7.4 happened on Sep 13th.

If we detected the earthquake before 2:37:54 AM we would have been sure that the market will resolve to yes. We therefore need a way to programmatically detect new earthquakes that fit the resolution criteria. Two things are important here: Speed and periodicity.

The importance of speed

Having an automation running assures us of a good fill price. Remember that we are competing with level 1 and 2 traders who place trades manually. We need to build scripts that outspeed them. Level ones will just infinitely refresh the source of truth page and input a buy when an M7 earthquake pops up. So our edge here is the various APIs that we use.

First, Polymarket's API is ESSENTIAL; this is where you submit your buy order. With this kind of setup, any fill price will be ok for us (as long as it is less than the fees) because we are sure to win.

Then, our own source of data. For my earthquake detection automation, I used this one. Our script connects via Websocket and compares every incoming earthquake with the resolution criteria (7 or higher).

The importance of periodicity

Do not aim for one shots. You want markets that happen every month. This makes the development effort more valuable. The earthquake market seems to be monthly. It can even be bi-monthly; it generally transforms into "Another earthquake magnitude 7 before ...". If the strategy works once, the more you can use it, the better.

Strategy implementation summary

I will not open-source the scripts, this would make me lose the edge entirely. However, here is a detailed summary of the execution. I'm sure you can figure things out in Cursor with this.

Example 2 : Initial public offerings

For this second example, we will focus on this market :

Note that there are many more companies in this market. The market resolves to Yes for one of the options if the company COMPLETES an initial public offering on the stock market. This means that these are currently private companies, and we bet on whether or not they will be tradable publicly in 2025.

Here, our approach will be a little bit different. To understand our approach, we need to understand one thing: SEC filings. Publicly traded companies are required to submit multiple documents a year (often quarterly) to the SEC. This enables more transparency in the stock market since the filings include earnings, balance sheet, etc... In the meantime, companies are also required to submit filings if they want to IPO.

IMPORTANT NOTICE: A company filing for an IPO does not guarantee the actual IPO. This only represents the company notifying the SEC that it wants to go public. The SEC still needs to approve the request. We can, however, anticipate a higher price for private companies that request an IPO.

Our strategy here will therefore be to scan the filings of all of these companies to detect when an IPO request is posted. Our goal will be for our script to react before the filing is priced in. From here, the price should go up, and our goal is to define a price target and sell. Since once again the filing doesn't guarantee an IPO, we should derisk as fast as possible.

To deploy this strategy, we will once again use the Polymarket API. This time, our source of truth will be EDGAR, which is the SEC's filings search and API platform.

Here are a few tips to implement your strategy :

• 10 API requests/seconds (batch your requests to not hit the limit)

• Companies are linked to a unique ID called CIK. There is an endpoint for that; you should retrieve each company's CIK and store it to later see their filings. This can, of course, be done with code.

• Like the previous strategy (earthquake monitoring), your setup must run 24/7. To do that, you have 2 options: 1. (if you have a stable internet and power) Buy a Raspberry Pi. 2. Rent a VPS (Cloud computer) via AWS, you can get free credits fairly easily here: https://aws.amazon.com/startups/credits

• The main filing for IPOs is Form S-1; your fetching mechanism must filter out any other form.

I haven't entirely built the strategy but here is the infrastructure I am planning for the script :

These are just two examples of markets that can be automated, there are way more that fall in the same category. Explore, research, think and code, that's the key to winning.

Conclusion

PvP always has winners and losers. If you want to be on the winning side, aim for Level 3. The profits won’t always be flashy and the dopamine hits will be fewer, but your gains will be steady. In this arena, the true winners are developers.

This article’s goal was to show you that many markets can be automated, and to spark your creativity in finding edges. Because once you start thinking like a builder, opportunities appear everywhere.

And what lies after Level 3? There are players with more resources, more tech, and sharper strategies. They operate quietly, off the radar, making serious profit from prediction markets. That story is for another article.

always, 888.