How to make money on Polymarket: strategies, rewards and the risks

Most people who trade prediction markets lose money. The ones who do not tend to follow the same few habits. Here they are, honestly.

You can make money on Polymarket, and some traders make a great deal. But it is worth starting with the honest part: between traders, a prediction market is close to zero-sum. When you profit on a share, the trader who sold it to you lost the same amount. To come out ahead over time, you need to be right more often than the price says, or earn money in ways that do not depend on picking winners at all.

Here are the approaches that work, and the risks that come with each.

1. Find markets where the price is wrong

This is the core of it. A share at 30 cents is a good buy only if the true chance is clearly above 30%. Your edge comes from knowing something the price does not reflect yet: a deeper reading of the polls, a better model of the sport, expertise in a niche field, or simply more careful work than the crowd has done.

Good habits here:

Write your own estimate before you look at the price. It stops the market from anchoring you.
Use base rates. How often has this kind of thing happened before? Markets often overprice dramatic outcomes and underprice dull ones.
Specialize. Traders who stick to one area they know well, a sport, a country's politics, a sector, tend to beat those who trade everything.

2. Trade the news, quickly and carefully

Prices move when information arrives. Traders who follow primary sources closely, official feeds, court dockets, live data, can sometimes act before the market has fully adjusted. The edge is real but brief, and it cuts both ways: rumours and fake headlines move prices too, and buying into a spike often means buying from someone who knew first.

Farsight's market pages pull in recent news and posts from news accounts on X next to each market, and flag the rare item that could move it sharply.

3. Take profits before the end

You never have to hold to resolution. If you bought at 20 cents and the price is now 60, selling locks in a 200% gain and frees your money for the next trade. Many profitable traders make most of their money this way, buying when an outcome looks underpriced and selling once the market catches up, rather than waiting months for a result.

4. Earn liquidity rewards by making markets

Polymarket pays daily liquidity rewards to traders who keep limit orders near a market's midpoint price. Each market lists its daily reward pool, the maximum distance from the midpoint that counts and the minimum order size. Quoting both sides of a market, a bid and an ask, generally earns more than one side alone.

The catch is adverse selection: your orders tend to get filled at the worst moment, just as news moves the price through them. Makers who earn steadily watch their markets closely, keep sizes modest and pull orders before big events. Farsight's market pages show each market's daily reward and who sponsors it.

5. Collect maker rebates and holding rewards

On market types that charge a taker fee, part of that fee is paid back to makers as rebates, so patient limit orders can earn on top of the trade itself. On some long-dated markets Polymarket also pays a holding reward on the value of positions held. Neither is large on its own, but for traders who already hold positions they add up. Farsight's profile pages break each trader's income into trading profit, rewards, rebates and fees.

6. Look for arbitrage

Because shares follow strict rules, prices sometimes break them for a moment:

Yes plus No below $1. If you can buy both sides of a market for less than $1 in total, you lock in a profit, since one side always pays $1.
Multi-outcome events that do not add up. In an event where exactly one outcome wins, the Yes prices should total about $1. When they total clearly more or less, there may be a trade.
The same question in two places. Related markets, on Polymarket or elsewhere, sometimes disagree on what is essentially the same event.

These gaps are usually small, short-lived and contested by automated traders. Fees, spreads and the time your money is locked up can erase them, so do the full sum before you trade.

7. Learn from the traders who win

Every trade on Polymarket is public. That means you can study exactly what the most profitable traders buy, when, and at what price. On Farsight you can sort the leaderboard by all-time or recent profit, open any trader's profile to see their positions, calendar of daily results and biggest wins, and add them to your tracker to get an alert the moment they trade.

Copying blindly is risky: a top trader may be hedging, may size positions very differently from you, or may simply be wrong this time. Use their trades as ideas to research, not as instructions.

8. Watch who is on each side

A market's price tells you what the crowd thinks. Its holders tell you who the crowd is. If one side is held mostly by traders with long records of profit and the other by new accounts, that is worth knowing. Farsight's market pages rank each side's holders, show how strong each side is, list the biggest winners and losers, and include an insider finder that flags new wallets, accounts that trade only one market and on-chain links between holders.

Managing risk

Size every position so a total loss is fine. Even a 90% favourite loses one time in ten.
Read the rules, every time. Markets settle on their exact wording and stated source, and many painful losses come from a market resolving on a technicality the trader never read. Check for clarifications too.
Mind liquidity. In a thin market you may not be able to sell at a fair price when you want to.
Count the time. A market that ends in a year ties up your money for a year. A 10% return over twelve months is not the same as 10% over a week.
Keep records for taxes. Rules differ by country, and trading gains are usually taxable. Your full trade history is on chain, and Farsight's profile pages show it in one place.

Common mistakes

Buying "sure things" at 95 to 99 cents. You risk 95 cents to win 5. One surprise wipes out many small wins, and surprises happen more often than prices at the extremes suggest.
Chasing a price after it has moved. Once the news is in the price, the easy money is gone.
Trading everything. Spreading thin across topics you do not know well hands your money to people who do.
Averaging down without new information. A falling price is often the market telling you something.

The bottom line

Making money on Polymarket is possible, but it is a skill, not a lottery ticket. The traders who last tend to specialize, size small, read the rules, sell when the market catches up, and use the public record of what everyone else is doing. Start small, keep track of your results honestly, and treat every trade as a forecast you have to be able to defend.

New to prediction markets? Start with What is Polymarket? and How Polymarket works.

This article is for education only and is not financial advice. Trading prediction markets carries a real risk of losing money.

Frequently asked questions

Can you really make money on Polymarket?

Yes, but most traders do not. Profits between traders are close to zero-sum, so consistent winners need an edge: better information or analysis, careful risk management, or income from liquidity rewards and rebates.

What is the safest way to make money on Polymarket?

There is no risk-free way. Providing liquidity for rewards and taking clear arbitrage are the least dependent on predicting outcomes, but both still carry risk from fast price moves, fees and locked-up capital.

How do Polymarket liquidity rewards work?

Polymarket pays a daily reward pool on many markets to traders whose limit orders sit within a set distance of the midpoint price and meet a minimum size. Orders on both sides of the market usually earn more.

How do I find the best traders on Polymarket?

Every trade is public, so you can rank traders by profit. Farsight's leaderboard sorts traders by all-time and recent profit, and each profile shows their positions, history and biggest wins.

Are Polymarket winnings taxed?

In most countries trading gains are taxable, but the rules differ. Keep a record of your trades and check with a tax professional where you live.