HOW TO · PAPER PRACTICE

How to use Arbitrage Scanner

Investigate why related prices may fail a simple consistency check.

Before you start

This is a two-input theoretical calculator. Its label does not mean it verifies executable opportunities or matching rulebooks.

Open Arbitrage Scanner

Step by step

  1. Choose two fictional outcomes for which exactly one must occur. Write down why they cannot both happen or both fail.
  2. Enter 45 in Market A YES Price (%) and 50 in Market B YES Price (%). Both fields are YES prices.
  3. Run the calculation and inspect the combined 95% price.
  4. List the assumptions missing from the arithmetic: actual available prices, fees, depth, timing, and identical settlement rules.

Worked example

One hypothetical share of each complementary outcome costs 0.95 points and pays a total of 1 point if exactly one resolves YES. The idealized surplus is 0.05 points, about 5.26% of the cost. If both can resolve NO, the conclusion fails.

What the result means

A gap is a prompt to inspect definitions. Correlation alone is insufficient. The tool also infers NO prices as 1 minus YES, which need not equal available NO quotes.

If something goes wrong

If the pair has different dates or overlapping outcomes, stop the calculation and choose a genuinely complementary fictional pair. A feed error is not a zero price.

Check your understanding

Compare ‘rain tomorrow’ and ‘rain this week.’ Explain why their percentages do not need to total 100%.