Combinatorial spread

Combinatorial spread

The combinatorial spread is the difference between $1.00 and the sum of the best-ask prices for every outcome in a multi-outcome Polymarket. When you add the lowest available ask on each leg and that total is less than $1.00, the combinatorial spread is the numeric gap you can potentially capture by buying a complete set.

In context

On Polymarket multi-outcome markets are mutually exclusive: fair prices should sum to $1.00. In practice, the CLOB can list different best asks for each outcome. If Σ bestAsk(outcome_i) < $1.00, the combinatorial spread is positive and signals an intra-market opportunity to buy the complete set (via a series of limit or FAK orders) and later redeem the winning token for $1.00 after resolution using the CTF redeem flow.

Because settlement uses the Gnosis CTF and Polymarket's Relayer sponsors gas, operational steps for capturing a combinatorial spread typically involve placing orders through the CLOB and, when required, performing CTF split/merge/redeem through the Relayer or an SDK. Maker fees on Polymarket are zero; taker fees are variable by category and should be included when assessing whether the combinatorial spread exceeds your execution and settlement costs.

Risks and practical limits

The combinatorial spread is a mathematical disparity, but it is not without risk. Common constraints include:

• Resolution risk: outcomes are settled via UMA's optimistic oracle; disputes can delay or change settlement.
• Slippage and partial fills: best asks may vanish as you execute, reducing or eliminating the spread.
• Fees and builder attribution: taker fees vary (0%–1.8% range by category) and builder fees may apply if routing through a Builder; account for them when calculating net edge.
• Tick size and liquidity: tick_size can tighten near price extremes (to $0.001), and thin books may make fills unpredictable.
• Settlement timing: redeeming winning tokens requires waiting for resolution and any UMA dispute window.

See also

• edge