Risk Sizing on Polymarket for Less Liquid Markets

asked by u/michael35 · 5d · 3 answers

Hey everyone, still figuring out my approach to Polymarket. I've noticed on some of the smaller, less active markets, the spread can be pretty wide, and my fills can get a bit chunky if I try to put in even a moderately sized position. For those of you who trade these lower liquidity events, how do you size your positions to manage the impact on price, or do you just mostly avoid them and stick to the bigger, more liquid markets?

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Top answers

  • u/salmamansour· 1 pts· 5d

    For less liquid markets, I find that even small positions can move the price significantly, so it's often more about whether the edge is large enough to justify the slippage rather than precise sizing.

  • u/jokomahmud· 1 pts· 5d

    This is a great point! I've run into the same issue. Are there any strategies for these less liquid markets beyond just using very small position sizes, or is it really just a matter of avoiding them if you're not planning on just a tiny bet?

  • u/nbautista· 1 pts· 5d

    I generally avoid larger positions on those lower liquidity markets for that exact reason. It's tough to get in and out without moving the price too much, especially on the exits.

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