Resolution Sniping: Buying Certainty at a Discount

Most trading strategies trade uncertainty. Resolution sniping does the opposite — it trades near-certainty, and it's an edge that simply doesn't exist outside prediction markets.

Here's the core idea. A prediction-market contract pays out exactly $1.00 if its outcome resolves YES. As an event approaches resolution and the outcome becomes nearly certain, the contract should trade near $1.00 — but it often lingers at 94¢, 95¢, 96¢. Buy at 95¢, hold to resolution, collect $1.00. That's a ~5% return on a position with a very high probability of paying out, often over a short holding period.

Why does the gap exist at all?

If it's nearly certain, why isn't it already at $1.00? A few reasons, and understanding them is the whole strategy:

• Capital efficiency. Holding to resolution ties up capital for hours or days. Many traders would rather redeploy than squeeze the last few cents, so they sell early at a small discount.
• Thin late-stage liquidity. As a market winds down, fewer participants are active. Small inefficiencies persist because nobody's arbitraging the last 5¢.
• Tail risk premium. "Near-certain" is not "certain." That residual 5¢ is partly the market pricing the small chance the outcome surprises everyone.

That last point is the one that matters for risk. Resolution sniping is high win-rate, not no-risk. The losses are rare but they're full: when a 95¢ "lock" resolves NO, you lose the whole position. The math only works if your win rate genuinely matches the prices you're paying and you size accordingly.

Why automate it

The edge lives in the details a human can't watch continuously:

• Scanning for certainty. Across hundreds of markets, you need to continuously surface contracts trading above a configurable certainty threshold (e.g. ≥ 95¢) with real depth.
• Speed on the entry. When a near-certain contract dips to 95¢ with size available, it can fill in seconds. A bot takes it; a human refreshing a page misses it.
• Discipline on sizing. The fastest way to ruin a high-win-rate strategy is to oversize, hit the rare loss, and give back a month of gains. A bot enforces position limits every time.

A resolution sniper bot scans for near-certainty outcomes across venues, validates depth, enters with a configurable certainty floor, and holds to resolution — mechanically, without the temptation to "just this once" oversize.

Sizing is the strategy

If you take one thing away: the returns are small and frequent, the losses are rare and total. That's a profile that rewards strict, uniform position sizing and punishes greed. Run it in dry-run first to confirm your win rate matches your entry prices, keep each position small relative to your bankroll, and let the law of large numbers do the work.

Getting started

Resolution sniping is one of ten strategies in the open-source Prediction Market Toolkits, with a configurable certainty scan and hold-to-resolution logic running on Polymarket, Kalshi, and Limitless. The same shared risk layer — circuit breaker, depth guard, trade-size floor — applies. There's a live overview at the project site.

Disclaimer

Trading prediction markets involves real financial risk. "Near-certain" is not certain — resolution sniping has rare but total losses, and nothing here is financial advice. Software is provided as-is without warranty. Always test in dry-run, size conservatively, and comply with each venue's terms and your local regulations.