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YichengYang-EthanYichengYang-Ethan/oracle3/skills/pm-constraint-arbitrage/SKILL.md

pm-constraint-arbitrage

Skill466 starsChanged 34 days agoApache-2.0View on GitHub

Check whether prices of related prediction-market contracts violate a probability bound after venue fees, using the oracle3 MCP server or Python API. Paper trading only.

  • Installs packages

We split this skill into the rules it gives an agent

5 rules. About 0 are common, 1 is distinctive, and 4 are very specific to this project.

  • ≈0

    Common · estimate

    Many files like this have a rule of this kind.

  • ≈1

    Distinctive · estimate

    This author's own choices. Worth a look.

  • 4

    Very specific

    Tied to their project's names, files or tools. Probably skip.

  • Common
  • Distinctive
  • Very specific
  1. Distinctive:

    Use this skill when the user asks whether related markets are mispriced relative to each other, for example "does P(A) exceed P(B) even …

    line 8
  2. Very specific:

    Run check_constraint_live with the relation and the markets in the order above.

    line 36
  3. Very specific:

    Read best.gross_edge_per_contract (edge before fees), best.fees_per_contract and best.net_edge_per_contract.

    line 37
  4. Very specific:

    Only if the net edge is positive and the book is deep enough, paper-trade each leg with paper_order at a limit no worse than the quoted ask.

    line 38
  5. Very specific:

    Never place real orders from this skill.

    line 42

≈ “Common” is an estimate: at least 1 in 5 of the 308,232 skill files we read have a rule of the same kind, not the same words. “Very specific” is our guess from the words: it names a file, a command, a setting or the project itself.

Keep what fits and drop the rest. Your version, ready for your agents.
Files
SKILL.md

PM Constraint Arbitrage

Use this skill when the user asks whether related markets are mispriced relative to each other, for example "does P(A) exceed P(B) even though A implies B?", or whether a cross-venue price gap survives fees.

Tools

MCP server (pip install oracle3, then run oracle3-mcp):

  • search_markets, get_quote, get_orderbook to find markets and read executable prices.
  • check_constraint_live to fetch quotes and fee schedules and evaluate a relation.
  • check_constraint to evaluate a relation on quotes you supply.
  • trading_fee to price a single fill under a venue's schedule.
  • paper_order, paper_portfolio to paper-trade the legs.

Python API: oracle3.arbitrage.check_constraint and oracle3.fees.

Relations

RelationBoundQuotes, in order
implicationP(A) <= P(B) when A implies BA, B
exclusivityprobabilities sum to at most 1every outcome
complementP(A) + P(B) = 1A, B
same_eventP(A) = P(B), one event on two venuesA, B
event_sumprobabilities sum to exactly 1every outcome

Steps

  1. Find the markets with search_markets and read both markets' resolution rules with get_market.
  2. Decide which relation holds. This is a judgment about the contract wording, not something the tool can verify.
  3. Run check_constraint_live with the relation and the markets in the order above.
  4. Read best.gross_edge_per_contract (edge before fees), best.fees_per_contract and best.net_edge_per_contract.
  5. Only if the net edge is positive and the book is deep enough, paper-trade each leg with paper_order at a limit no worse than the quoted ask.

Hard rules

  • Never place real orders from this skill; the MCP server cannot, and the CLI live mode is out of scope.
  • State the relation you assumed and why; a wrong relation turns an "arbitrage" into a directional bet.
  • Report fees per leg. Kalshi taker fees are 0.07·M·C·P·(1−P); Polymarket taker fees are rate·C·p·(1−p) with a per-market rate; Polymarket makers pay nothing.
  • The check assumes every leg fills at the quoted price. Say so when the displayed size is smaller than the order.

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