> ## Documentation Index
> Fetch the complete documentation index at: https://docs.clypt.ai/llms.txt
> Use this file to discover all available pages before exploring further.

# Prediction Markets

> Expanding Clypt into prediction market trading and strategy development

## Overview

Clypt will expand into **prediction markets**, enabling users to build and deploy quantitative strategies that trade on event outcomes. The same StatefulGraph architecture and operator protocol that powers crypto trading will extend to event-based contracts.

## Why Prediction Markets

Prediction markets are growing rapidly as a new asset class:

* **Polymarket** processed \$1B+ in volume in 2024
* Event contracts offer uncorrelated returns to traditional crypto/equity markets
* The market structure (binary/scalar outcomes, fixed expiry) creates unique alpha opportunities
* Most prediction market trading is currently manual — quantitative automation is the next frontier

## Platform Integration

### Data Integration

Prediction market data uses the existing `OHLCVSpec` — no separate spec needed:

```python theme={null}
from clyptq.apps.trading.spec.observation.crypto import OHLCVSpec

# Polymarket and Kalshi data flows through the standard OHLCV pipeline
prediction_data = OHLCVSpec(exchange="kalshi", market_type="prediction", timeframe="1m")
```

### New Operators

Prediction market-specific operators planned:

| Operator                  | Category  | Description                                        |
| ------------------------- | --------- | -------------------------------------------------- |
| **ProbabilityCalibrator** | Transform | Calibrate implied probabilities from market prices |
| **EventResolver**         | Signal    | Track event resolution and settlement              |
| **ExpiryDecay**           | Signal    | Time decay signal as event approaches resolution   |
| **CrossMarketArb**        | Alpha     | Arbitrage between prediction market platforms      |
| **SentimentCorrelation**  | Semantic  | Correlate news sentiment with contract prices      |
| **MarketMaker**           | Order     | Automated market making for prediction contracts   |

### Execution

The existing `TradingDriver` and `TradingIntention` pipeline extends to prediction market execution:

* Binary contract buying/selling
* Limit order placement for market making
* Automated settlement and profit collection

## Key Challenges

| Challenge                  | Approach                                         |
| -------------------------- | ------------------------------------------------ |
| **Low liquidity**          | Market making operators, smart order routing     |
| **Event resolution risk**  | Resolution tracking, early exit logic            |
| **Non-standard data**      | Custom ObservationSpec with probability fields   |
| **Platform API diversity** | Exchange-agnostic adapter layer (same as crypto) |

## Timeline

Prediction market integration is planned for **Phase 2-3**:

1. **Phase 2**: Polymarket data integration + basic event operators
2. **Phase 3**: Full strategy support, marketplace listing, additional platforms

## Related Pages

<CardGroup cols={2}>
  <Card title="Data System" icon="database" href="/engine/data-system">
    How ObservationSpec handles different data sources
  </Card>

  <Card title="Semantic Operators" icon="brain" href="/operators/semantic">
    LLM and web search for event analysis
  </Card>
</CardGroup>