polymarket-ai-divergence

name	polymarket-ai-divergence
description	Find markets where Simmer's AI consensus diverges from the real market price, then trade on the mispriced side using Kelly sizing. Scans for divergence, checks fees and safeguards, and executes trades on zero-fee markets with sufficient edge.
metadata	{"author":"Simmer (@simmer_markets)","version":"2.3.0","displayName":"Polymarket AI Divergence","difficulty":"intermediate"}

Polymarket AI Divergence Trader

Find markets where Simmer's AI consensus diverges from the real market price, then trade the edge.

This is a template. The default logic trades when AI divergence exceeds 2% on zero-fee markets, using Kelly sizing capped at 25%. Remix it with different edge thresholds, sizing strategies, or additional filters (e.g., only trade markets resolving within 7 days). The skill handles plumbing (divergence scanning, fee checks, safeguards, execution). Your agent provides the alpha.

What It Does

1. Scans all active markets for AI vs market price divergence
2. Filters to markets with edge above threshold (default 2%) and zero fees
3. Checks safeguards (flip-flop detection, existing positions)
4. Sizes using Kelly criterion, capped conservatively
5. Executes trades on the mispriced side (YES when AI is bullish, NO when bearish)

Setup Flow

When user asks to install or configure this skill:

1. Install the Simmer SDK

   pip install simmer-sdk
   

2. Ask for Simmer API key

   • They can get it from simmer.markets/dashboard → SDK tab
   • Store in environment as SIMMER_API_KEY

3. Ask for wallet private key (required for live trading)

   • This is the private key for their Polymarket wallet (the wallet that holds USDC)
   • Store in environment as WALLET_PRIVATE_KEY
   • The SDK uses this to sign orders client-side automatically — no manual signing needed
   • Not needed for $SIM paper trading on the Simmer venue

Quick Commands

# Scan only (dry run, no trades)
python ai_divergence.py

# Scan + execute trades
python ai_divergence.py --live

# Only show bullish divergences
python ai_divergence.py --bullish

# Only >15% divergence
python ai_divergence.py --min 15

# JSON output
python ai_divergence.py --json

# Cron mode (quiet, trades only)
python ai_divergence.py --live --quiet

# Show config
python ai_divergence.py --config

# Update config
python ai_divergence.py --set max_bet_usd=10

Configuration

Key	Env Var	Default	Description
min_divergence	SIMMER_DIVERGENCE_MIN	5.0	Min divergence % for scanner display
min_edge	SIMMER_DIVERGENCE_MIN_EDGE	0.02	Min divergence to trade (2%)
max_bet_usd	SIMMER_DIVERGENCE_MAX_BET	5.0	Max bet per trade
max_trades_per_run	SIMMER_DIVERGENCE_MAX_TRADES	3	Max trades per cycle
kelly_cap	SIMMER_DIVERGENCE_KELLY_CAP	0.25	Kelly fraction cap
daily_budget	SIMMER_DIVERGENCE_DAILY_BUDGET	25.0	Daily spend limit
default_direction	SIMMER_DIVERGENCE_DIRECTION	(both)	Filter: "bullish" or "bearish"

Update via CLI: python ai_divergence.py --set max_bet_usd=10

How It Works

Divergence Signal

Each imported market has two prices:

• AI consensus (current_probability) — Simmer's AI consensus price, derived from multi-model ensemble forecasting
• External price (external_price_yes) — Real market price on Polymarket/Kalshi

divergence = AI consensus - external price

When divergence > 0: AI thinks the market is underpriced → buy YES When divergence < 0: AI thinks the market is overpriced → buy NO

Kelly Sizing

Position size uses the Kelly criterion:

kelly_fraction = edge / (1 - price)
position_size = kelly_fraction * max_bet_usd

Capped at kelly_cap (default 25%) to limit risk.

Fee Filtering

75% of Polymarket markets have 0% fees. The remaining 25% charge 10% (short-duration crypto/sports). This skill only trades zero-fee markets to avoid fee drag eroding the edge.

Safeguards

• Fee check: Skips markets with any taker fee
• Flip-flop detection: Uses SDK's context API to detect contradictory trades
• Position check: Skips markets where you already hold a position
• Daily budget: Stops trading when daily spend limit is reached
• Kelly sizing: Conservative sizing prevents over-betting

API Endpoints Used

• GET /api/sdk/markets/opportunities — Divergence-ranked market list
• GET /api/sdk/context/{market_id} — Fee rate and safeguards per market
• POST /api/sdk/trade — Trade execution (via SDK client)
• GET /api/sdk/positions — Current portfolio positions

Troubleshooting

"No markets above min edge threshold" → All divergences are below the min_edge setting. Lower it with --set min_edge=0.01 or wait for larger divergences.

"Daily budget exhausted" → The skill has hit its daily spend limit. Adjust with --set daily_budget=50.

All markets skipped for fees → Only zero-fee markets are traded. If all available divergence opportunities have fees, no trades execute. This is by design.

"context fetch failed" → The SDK context endpoint is rate-limited (18 req/min). If running frequently, reduce max_trades_per_run.