Arbitrage Bot

The Arbitrage Bot works the current Polymarket BTC up/down market, accumulating hedged YES+NO inventory. It reads the live order book on Binance BTC/USDT to gauge short-term buy vs sell pressure (order-book imbalance, “OBI”) and uses that to time a cheap entry on each leg — buying Up (YES) while pressure is bullish and Down (NO) while bearish. One outcome resolves to $1, so every matched YES+NO pair pays out $1 and the edge is the spread between what the pair cost to assemble and that $1.

• Binance order-book-imbalance (OBI) entry timing
• Builds hedged YES+NO pairs that redeem at $1
• Dynamic per-trade sizing (inventory, price, PnL feedback)
• OBI-flip and profit-take rebalancing, held to resolution
• Auto-rolls to each new BTC up/down window
• Per-window spend cap

The strategy

In a binary market exactly one outcome resolves to $1, so a complete set — one YES and one NO — always pays $1. Assembling that set for less than $1 is locked-in profit. The trick is getting each leg cheaply. Each Binance depth update is reduced to a single OBI value from −100 (heavy selling) to +100 (heavy buying), weighted toward the top of the book; its rolling average gives a directional read:

avg OBI > up threshold ⇒ buy YES  ·  avg OBI < down threshold ⇒ buy NO

The bot leans into the favoured leg first, then buys the opposite leg to hedge when pressure reverses (or to bank a move once price has run past your profit delta) — accumulating matched pairs as the window plays out. Because it only ever buys, both legs are held to the window's resolution, where the winning side redeems at $1. Trading pauses when price leaves the configured band (the market is effectively decided), and sizing is dynamic so the two legs stay roughly balanced.

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