Looking at just the odds isn’t enough. How traders gain an edge on prediction markets

Gaining an edge on prediction markets requires speed and skills beyond just reading the odds on platforms like Kalshi and Polymarket.

The top 3

Arbitrage Opportunities Across Platforms and Contracts: Traders profit by identifying price discrepancies for the same event across different prediction market platforms or within a single market, buying low and selling high to guarantee a risk-free return.
Exploiting Behavioral Biases, like Longshot Bias: A common inefficiency is the 'favorite-longshot bias,' where contracts on low-probability outcomes (longshots) are systematically overpriced, while high-probability outcomes (favorites) are underpriced, allowing savvy traders to bet against these biases.
Market Making and Providing Liquidity for Fees: Market makers provide liquidity by continuously quoting both buy and sell prices for event contracts, profiting from the spread between bids and asks while helping other traders efficiently enter and exit positions.