Central Limit Order Book (CLOB) · PolyArb

CLOB (Central Limit Order Book) — a matching engine that pairs buyers and sellers via a continuous order book.

Definition

A Central Limit Order Book is a live, continuous record of limit orders sorted by price and time. On Polymarket the CLOB holds resting bids and asks for each outcome; incoming orders either match against these resting orders or themselves become resting orders until filled or cancelled.

In context on Polymarket

Polymarket's exchange is built on a CLOB. When you place a limit order it enters the book and sits at its price level until matched by another trader. Market orders (FAK) execute immediately against the best available resting orders in the CLOB, subject to slippage and taker fees. The book is the source of best_bid, best_ask, midpoint, spread, and historical trade data exposed by the CLOB API and the Market WebSocket.

Why it matters for arbitrage

A CLOB makes intra-market arbitrage possible because you can observe the best-ask prices for every outcome and buy the legs needed to form a complete set. For binaries, the CLOB enforces market liquidity and visible spreads so you can compute edge = $1.00 − (bestAsk(YES) + bestAsk(NO)). For multi-outcome markets you sum outcome best asks and compare to $1.00 to find combinatorial opportunities. Remember: the arithmetic identifies an opportunity, but execution risks remain (slippage, partial fills, fees, and resolution timing).

Operational notes

The CLOB exposes order book snapshots and real-time updates via Polymarket's CLOB API and Market WebSocket. Use the websocket when you need low-latency best_bid_ask and last_trade_price events.
Maker fees on Polymarket are zero; taker fees vary by category. Market orders on the CLOB are implemented as FAK (Fill-And-Kill) to avoid indefinite hanging market orders.
Tick size and tightness of the book affect execution; Polymarket tightens tick size near extreme prices, which you can observe via tick_size_change events.

Related terms