Cross-Platform Gaps, Explained
Why the same event trades at different odds on Polymarket and Kalshi — and why that gap is usually not free money.
What a cross-platform gap is
Two prediction venues can quote the same outcome at different probabilities — say one platform prices “no change” at 91.5% while another prices it at 90.5%. That 1-point spread is a cross-platform gap. XPOWER reports the largest such gap on every event page (§6 Cross-Platform Read), next to the settlement-terms comparison (§7).
The two-sided math
In principle, a gap can be “locked” by taking both sides at once — YES on the venue where the outcome is cheap, NO on the venue where it is expensive. A fixed illustration:
YES on venue A : 90.5% → $90.50 per $100 payout NO on venue B : 8.5% → $ 8.50 per $100 payout (1 − 91.5%) ────────────────────────────────────── two-sided cost : $99.00 → pays $100 either way gross spread : +1.0% before costs
Whichever way the event settles, one side pays $100 — so the position “earns” the gap. Before costs. That last clause is where most gaps die.
Why it is usually not free money
Venue fees. Trading and settlement fees commonly total 1–2% across two venues — often more than the gap itself.
Spread and slippage. Quoted mid-prices are not fill prices; thin books move against size.
Settlement wording. The venues may define the “same” event differently — different cutoff dates, different data sources, different edge-case rules. If the two contracts can settle in opposite directions, the position is not hedged at all; it carries basis risk. This is exactly what the definition-match dots in §7 of every event page grade.
Capital lockup. Both leg amounts are locked until resolution, which can be months away — the annualised return on a small gap is often negligible.
Why gaps persist at all
If gaps were free money they would vanish instantly. They persist because the venues are separated in ways that block the flow of capital: different KYC and geographic access rules, different collateral (crypto vs fiat), fee friction, and the settlement-wording risk above. A visible gap is mostly a measure of that separation, not of anyone’s mistake.
How XPOWER reports it
Each event page shows the raw gap (largest same-outcome spread across venues), a wording review (how much of the gap plausibly reflects settlement differences rather than price disagreement), and the gap math above computed on live odds. XPOWER describes the arithmetic; it does not recommend positions.