Polymarket Weather Arbitrage Bot

A specialized bot designed to identify profitable betting opportunities in Polymarket's weather markets. It leverages real-time weather forecasts and compares them with market probabilities to calculate Expected Value (EV) and recommend Long/Short positions or blanket strategies.

Features

• Real-time Market Scanning: Fetches active weather events from Polymarket (Gamma API).
• Accurate Forecasting: Integrates with Open-Meteo API to get precise daily high/low temperature forecasts for specific locations and dates.
• EV Calculation: Mathematical modeling to determine the "True Probability" of outcomes versus Market Implied Probability.
• Strategy Recommendations:
  • Individual Bets: Specific Yes/No bets with positive EV.
  • Blanket Strategies: Buying multiple buckets to cover a sure-win range at a discount (Arbitrage).
  • Portfolio Analysis: Portfolio sizing and risk analysis (Kelly Criterion) for combined short positions.
• Safety Checks: Automatically filters out past or same-day events to avoid execution risk on resolving markets.
• Demo Mode: Includes a mock data mode for testing logic without API calls.

Directory Structure

polymarket/
├── main.py                 # Main entry point
├── analysis/               # Core logic for EV and Portfolio math
│   ├── arbitrage.py        # EV calculation
│   └── portfolio.py        # Portfolio simulation and Kelly bet sizing
├── utils/                  # API integrations
│   ├── polymarket_api.py   # Polymarket (Gamma) API wrapper
│   └── weather_api.py      # Open-Meteo Weather API wrapper
├── requirements.txt        # Project dependencies
└── docs/                   # Detailed documentation

Prerequisites

• Python 3.8 or higher.
• Internet connection for fetching API data.

Installation

1. Clone the repository:

   git clone https://github.com/yourusername/polymarket-weather-bot.git
   cd polymarket-weather-bot

2. Install dependencies: It is recommended to use a virtual environment.

   # Create virtual environment (optional)
   python -m venv venv
   
   # Activate virtual environment
   # Windows:
   .\venv\Scripts\activate
   # Linux/Mac:
   source venv/bin/activate
   
   # Install requirements
   pip install -r requirements.txt

Usage

Run the Bot (Live Mode)

To fetch live data from Polymarket and Open-Meteo:

python main.py

Run in Demo Mode

To see how the bot analyzes data using hardcoded mock examples:

python main.py --demo

How It Works

1. Fetch: The bot queries Polymarket for "Weather" tagged events (e.g., "Highest temperature in New York on Jan 15").
2. Parse: It extracts the city and date from the event title.
3. Forecast: It queries Open-Meteo for the specific date and location to get the Max/Min temperature forecast.
4. Analyze:
   • Calculates the probability of each temperature bucket (e.g., "< 40F", "40-50F") using a Normal Distribution centered on the forecast.
   • Compares "True Prob" vs. "Market Price".
5. Recommend: Outputs bets where EV > 0.

Disclaimer

This software is for educational and research purposes only. Betting involves financial risk. The authors are not responsible for any financial losses incurred from using this software.