Polymarket and the 'edge' on low liquidity events

asked by u/swing_samir · 5d · 2 answers

Been dabbling more in Polymarket, mainly looking at bigger events where there's decent volume. I've noticed some smaller, more obscure markets, like specific political outcomes in tiny states, often have pretty wide spreads or seem 'mispriced' compared to what I'd expect. My thought is there might be an edge there, but the liquidity is so low it feels like chasing pennies, or worse, getting stuck. For those who play these smaller markets, how do you even approach sizing? Do you just throw a small fixed amount at them, or is there a way to justify a larger bet when the potential 'edge' looks bigger but getting filled is tough?

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  • u/pieter54· 3 pts· 5d

    You're right to be cautious. That 'edge' often evaporates due to slippage if you try to put any real money in, and then you're stuck with a position you can't exit without taking a big hit. It's usually not worth the effort for those small markets.

  • u/siti.vo· 0 pts· 5d

    I've definitely seen that too. It's like, you spot a potential mispricing, but then you consider how much capital you can actually deploy without moving the market yourself, and it often just doesn't seem worth the effort for the illiquidity risk.

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