A
Adverse Selection
When informed traders systematically pick off your resting limit orders because they have better information. The primary risk for market makers. See Liquidity Rewards.
APScheduler
Python scheduler library commonly used in bot stacks to run periodic tasks (e.g., rescan markets every 5 minutes).
Arbitrage
Exploiting price differences between markets to lock in profit. On Polymarket, cross-platform arb windows have shrunk to seconds and are dominated by bots. See Advanced Strategies.
Ask (Offer)
The lowest price at which someone is willing to sell shares in the order book.
Atomic Settlement
A trade where all sides clear simultaneously on-chain - no counterparty can back out mid-settlement.
B
Backtest
Evaluating a strategy on historical data to estimate future performance. Polymarket's Data API enables trade-level backtesting.
Base Rate
The historical frequency of an event. Anchors probability estimates before current-event adjustments. See Probability Thinking.
Basis
The difference between two related prices (e.g., perp vs spot, April BTC market vs June BTC market). Basis trades harvest this spread.
Bid
The highest price at which someone is willing to buy shares.
Binary Market
A market with exactly two outcomes: Yes / No. The most common type on Polymarket.
Bond (UMA)
A $750 USDC deposit required to propose or dispute a market resolution via the UMA Oracle. Slashed if the proposal or dispute loses. See UMA Disputes.
Bridge
A service that moves assets between blockchains (e.g., USDC from Ethereum to Polygon). Polymarket deposits use the Polygon PoS bridge.
C
Calibration
How well your probability estimates track actual outcomes. A well-calibrated trader's 70% calls come true ~70% of the time.
Catalyst
A scheduled or unscheduled event that triggers price movement (Fed meeting, election night, drug approval, Super Bowl kickoff).
CFTC
Commodity Futures Trading Commission. The US federal regulator of commodity derivatives and now prediction-market event contracts.
Chainlink Data Streams
Sub-second, cryptographically verified price oracle. Polymarket uses it for crypto price-target markets. See Crypto Trading.
CLOB
Central Limit Order Book. The matching engine that pairs buyers and sellers. Orders rest on the book sorted by price. See Order Book Guide.
CLV (Closing Line Value)
Whether you entered at a better price than where the market closed. Positive CLV over many trades is a strong sign of edge.
Condition ID
Unique identifier for a market in the Gamma API. Must be mapped to token IDs for trading. See API Guide.
Conditional Token Framework (CTF)
Ethereum/Polygon standard (Gnosis) that turns prediction market shares into ERC-1155 tokens.
Cost Basis
The price you paid for shares. Drives capital gains / loss calculations. See Tax Guide.
Cross-Margin
When margin is shared across all open positions in an account (vs isolated margin per position). Relevant for perps.
D
DCM
Designated Contract Market. CFTC designation that lets Polymarket operate legally in the US via the QCEX acquisition.
Delta
The sensitivity of a position's P&L to a change in the underlying variable. A 50-cent share has roughly 0.5 delta to the outcome probability.
Depth
Dollar volume available at each price level in the book. Indicates how much you can trade before moving price.
Dispute (UMA)
A challenge to a proposed market resolution. Requires a $750 bond; if upheld, the disputer wins the proposer's bond. See UMA Disputes.
Dune Analytics
SQL-based on-chain analytics platform. Hosts many community-built Polymarket dashboards. See Tools & Resources.
DVM
Data Verification Mechanism. UMA's full token-holder vote, used when Optimistic Oracle disputes escalate. 48-96 hour resolution window.
Dynamic Fee
Polymarket's taker-fee model where the fee scales with proximity to 50% probability. Fees peak near 50c and fall near 0c/100c.
E
Edge
Your probability estimate minus the market price. Positive edge = you think the market is mispriced in your favour.
EIP-712
Ethereum standard for structured-data signing. Used by py-clob-client to sign Polymarket orders.
EV (Expected Value)
Probability-weighted average outcome. Formula: (p_win × profit) - (p_loss × loss).
F
FAK (Fill And Kill)
Order type: fill whatever is immediately available at the limit price, cancel the rest. Acts like a capped market order.
Favorite-Longshot Bias
Tendency for long-shots to be over-priced and favorites to be under-priced. Documented in every prediction market.
FOK (Fill or Kill)
Order type: fill the entire size immediately or cancel. All-or-nothing. Useful for arbitrage legs.
Funder Address
Your proxy wallet address. Set in the py-clob-client
funder parameter.Funding Rate
In perpetual futures, the periodic payment between longs and shorts that keeps perp price aligned with spot. Typically ±0.01%/8h. See Perpetual Futures.
G
Gamma API
Polymarket's market-discovery REST API. Returns markets, prices, volume, metadata. Unauthenticated.
Gas
The fee paid to the blockchain for executing a transaction. On Polygon, typically pennies; on Ethereum mainnet, can be much higher.
GTC (Good Till Cancelled)
Default order type. Rests on the book until filled or you cancel.
GTD (Good Till Date)
Order that auto-cancels at a specified time.
H
Half-Life (Information)
How long it takes for the price impact of news to decay by 50%. On Polymarket, roughly 4 hours for typical news events.
Hedge
A position taken to reduce exposure to an adverse outcome. Properly sized hedges are not dollar-for-dollar - see Advanced Strategies.
Heuristic
A mental shortcut used to estimate probabilities quickly (e.g., "incumbent presidents are favored in strong economies").
I
Implied Probability
The market's current share price interpreted as a probability (a $0.65 share = 65% implied probability).
Implied Volatility
The magnitude of price movement implied by option or ladder-market prices. Short-duration crypto markets on Polymarket effectively price implied vol.
Informed Flow
Trading volume from participants with an information edge (insiders, analysts, faster news feeds). Whale trackers try to catch this.
K
Kelly Criterion
Formula for the optimal fraction of bankroll to wager given your edge. Full-Kelly is too volatile; quarter-Kelly is the professional standard. See Position Sizing.
KYC
Know Your Customer. Identity verification required for deposits, higher volumes, and US DCM access.
L
Ladder Market
A series of related markets with progressive price/outcome thresholds (e.g., BTC above $100K / $110K / $120K by date).
Limit Order
Order with a specific price. Fills at your price or better. Pays 0% fees and earns maker rebates.
Liquidation
In perps, forced closure of a leveraged position when losses exceed maintenance margin. See Perpetual Futures.
Liquidity
Ease of buying/selling without moving price. More liquidity = tighter spreads + less slippage.
Liquidity Rewards
Polymarket's ~$5M+/month general program plus $5M+/month sports-specific program paying rebates to two-sided market makers. See Liquidity Rewards.
Long
Position that profits if outcome is Yes (or if the tracked asset rises in perps).
M
Maker
Trader whose limit order rests on the book, providing liquidity. Pays 0% fee, earns rebate.
Maker Rebate
20-25% of taker fees returned to makers as a reward for providing liquidity.
Margin
Collateral posted to open or maintain a leveraged position in perps.
Market Maker
A trader who continuously quotes both sides (bid + ask) to earn the spread and rebates.
Market Order
Order that executes immediately at best available price. Pays taker fee (0.75-1.80% depending on category).
Mean Reversion
Tendency of overextended prices to pull back to fair value. On Polymarket, ~60% of mean-reversion completes within 90-120 minutes of a news event.
Mention Market
A market resolving on word frequency in a speech or event (e.g., "How many times will the Fed chair say 'inflation'?"). See Science & Tech Trading.
Midpoint
Price exactly between best bid and best ask. Reference point for liquidity rewards.
MOOV2
Managed Optimistic Oracle V2. UMA upgrade (August 2025) restricting market resolution proposals to whitelisted addresses. Post-launch: 59% fewer bad proposals, 68% fewer disputes. Whitelist grew from 37 to 177 addresses through 2025-2026.
Multi-Outcome Market
Market with 3+ outcomes (Oscar winner, election, race winner). See Multi-Outcome Guide.
N
NegRisk
Negative-risk mechanism for multi-outcome markets. Recognises that only one outcome can win, reducing required collateral. Achieves ~9.5x capital efficiency vs raw CTF.
NegRisk Adapter
Smart contract that wraps binary CTF positions into capital-efficient multi-outcome positions.
Nonce
A counter included in signed orders to prevent replay attacks. py-clob-client manages nonces automatically.
Notional
Total dollar size of a leveraged position (margin × leverage).
O
Optimistic Oracle (UMA)
UMA's default resolution mechanism: proposed answer is assumed correct unless disputed within 2 hours. Low-friction when answers are obvious.
Oracle
System that brings off-chain data (real-world outcomes) on-chain for smart contract use. Polymarket uses UMA and Chainlink.
Order Book
All pending buy and sell orders sorted by price. See Order Book Guide.
Outcome Token
A share representing one outcome. Pays $1.00 if correct, $0.00 if incorrect.
Overreaction
Market moving further than new information justifies. The setup for fade strategies.
P
Perpetual Futures (Perps)
Continuous leveraged contracts with no expiry. Polymarket launched April 21, 2026 with BTC, NVDA, Gold at up to 10x. See Perpetual Futures.
POLY_PROXY
Signature type 1 in py-clob-client. The standard setting for retail proxy-wallet users.
Polygon
Ethereum Layer-2 chain where Polymarket trades settle. Low fees, fast confirmations.
Position
Your current holding (shares × side × cost basis).
Probability
Estimated likelihood of an event. On Polymarket, share price in dollars ≈ implied probability (0.65 = 65%).
Proposer
Address submitting a resolution outcome via UMA. Post-MOOV2, only whitelisted proposers are accepted.
Proxy Wallet
A Gnosis Safe-style wallet that executes trades on behalf of your main wallet. Your private key never signs trades directly.
pUSD
Polymarket's internal USDC-backed collateral token.
Q
QCEX
CFTC-licensed exchange acquired by Polymarket in July 2025 for $112M to enable US market re-entry.
Quarter-Kelly
One-fourth of the Kelly Criterion's recommended bet size. Standard professional sizing.
R
Rebate
Payment from exchange to makers for providing liquidity. On Polymarket, 20-25% of taker fees.
Resolution
Determining and settling a market's outcome. Can be UMA, Chainlink, or internal Polymarket team.
Resolution Source
The authoritative source for resolving a market (e.g., AP/Fox/NBC for US elections; BLS for CPI data).
Retry-After
HTTP header returned with 429 rate-limit responses indicating when to retry.
S
Section 1256
US tax code section providing 60/40 long-term/short-term capital gains treatment for certain regulated futures contracts. Relevant to Polymarket perps.
Share
Unit of a prediction market position. $1.00 if correct, $0.00 if incorrect.
Short
Position that profits if outcome is No (or tracked asset falls in perps).
Signature Type
py-clob-client configuration.
0 = direct wallet; 1 = POLY_PROXY (standard retail).Slippage
Difference between expected and actual execution price. Worse in thin books or with large orders.
Spoofing
Placing large orders you intend to cancel to fake liquidity. Manipulative and prohibited.
Spread
Best ask minus best bid. Tighter = more liquid.
Stablecoin
A crypto token pegged to a fiat currency (USDC = $1).
Stake
Dollar amount risked on a position.
T
Taker
Trader whose order executes immediately against resting orders. Pays taker fee (0.75-1.80% by category).
Tick
The smallest price increment in the order book (Polymarket uses $0.01 ticks for most markets).
Tilt
Emotional state (usually post-loss) where discipline breaks down. Highest cause of retail blow-ups. See Trading Psychology.
Token ID
Unique identifier for a specific outcome (Yes or No) in CLOB. Required for trading.
U
UMA
Universal Market Access. The optimistic oracle protocol that resolves most Polymarket markets. See UMA Disputes.
UMA Token
The governance token whose holders vote on disputed resolutions in the DVM.
USDC
Circle-issued US dollar stablecoin. Polymarket's settlement currency.
UTXO
Unspent transaction output. Not directly relevant to Polymarket (account-based) but sometimes referenced in tax software.
V
Vig (Vigorish)
The house edge. On Polymarket this appears as fees; on traditional sportsbooks it's ~4-10%.
Volatility
Magnitude of price movement over a period.
Volume
Total dollar amount traded in a market over a time window. Proxy for liquidity and interest.
W
Wallet (Crypto)
Software that holds your private keys and signs transactions. MetaMask, Rabby, Coinbase Wallet are common.
Watchlist
Your curated list of markets to monitor.
WebSocket
Persistent bidirectional connection used for real-time price / order updates. See API Guide.
Whale
Trader large enough to move prices, typically $50,000+ deployed. See Whale Tracking.
Whitelisted Proposer
UMA address authorised to submit resolutions post-MOOV2. Requires strong track record (5+ proposals, 95%+ accuracy, 6-month rolling window).
Wick
A brief price spike that quickly reverts. On high-leverage perps a wick can trigger liquidation even if the move is fully recovered seconds later.
Y
Yield
The return earned from a position over time, expressed as a percentage. Often used in basis / funding trades.
Z
Zero-Sum
A market where total winnings equal total losses (pre-fees). All prediction markets are zero-sum minus the fee drag.
No matching terms.
