Is this arbitrage opportunity still profitable after real costs?
Only if the spread between the payout and the two leg prices is larger than everything it costs to fill both legs: fees, slippage and fixed transfer costs. Legs at $0.41 and $0.54 leave $0.05 per pair before costs; in the default example, $0.0476 survives them.
The calculator turns that per-pair edge into total profit and return for the number of pairs your bankroll can buy.
- Best for
- Cross-venue and complementary arbitrage checks
- Primary output
- Net edge per pair and total profit
- Use before
- Sending either leg of an arbitrage trade
Key points
- Turns the headline spread into net edge after costs
- Sizes the trade to the pairs your bankroll can buy
- Works for cross-venue pairs such as Polymarket and Kalshi
Method and assumptions
How arbitrage net edge is calculated
Gross edge per pair is the payout minus the two leg prices. It assumes both legs fill at those prices with no other costs.
Net edge subtracts the fee and slippage on each leg. Flat costs such as withdrawals come off the total. Net edge and total net profit are the numbers to decide on.
- Gross edge: the spread before costs
- Variable costs: scale with price and size
- Flat costs: matter most on small trades
- Net edge: the number to decide on
How to use the arbitrage calculator
Enter prices you can fill at your size. If the best quote covers only a few contracts, use the average price for the full order.
Enter only capital already on both venues. If money still has to move, add the transfer cost and assume the gap may close before it arrives.
- Enter both leg prices and the standard payout per matched pair.
- Add fee and slippage assumptions for each leg separately.
- Include flat movement or withdrawal costs.
- Check whether the net edge still clears your minimum threshold.
Worked arbitrage example
Leg A costs $0.41, leg B $0.54, and a matched pair pays $1.00, so gross edge is $0.05 per pair. Fees of 0.10% and slippage of 0.15% on each leg add $0.0024 per pair, which leaves a net edge of $0.0476.
$2,500 covers 2,616 pairs including $8 of flat costs. They pay $2,616 at settlement, for a total net profit of $116.59, or 4.66% on the $2,499.41 deployed. That assumes all 2,616 pairs fill at these prices, so check the depth on both books first.
- Gross edge can be positive while net edge is negative
- Bankroll helps only if the books have the depth
- The result is only as good as the fill assumptions
Arbitrage mistakes that erase the edge
Top-of-book quotes rarely cover the full order. Model the depth you would actually take, and treat a setup that works only with near-zero slippage as no setup.
Check the rules as well as the prices. A net edge means nothing if the two contracts do not settle on the same event.
- Ignoring book depth and realistic fill quality
- Using aggressive slippage assumptions that only work at tiny size
- Treating gross edge as if it were deployable profit
- Skipping rule parity checks across venues
Sources and assumptions
Frequently asked questions
What is the difference between gross edge and net edge?
Gross edge is the spread before costs. Net edge is what remains after fees, slippage and flat cash costs.
Why does the calculator ask for separate slippage on each leg?
Because the two venues or books can have very different depth. One leg is often thinner and more expensive to fill than the other.
Can a positive net edge still be a bad trade?
Yes. If the contracts do not settle the same way, if the size cannot be filled, or if moving money is too slow, the setup can still be poor.
What is a reasonable minimum net edge?
It depends on your workflow, but keep a buffer above zero: fills almost always come in worse than the first estimate.