A hedge only works when the two payoffs line up

Buying one side and selling another can feel like a hedge. The protection is real only when the two payoffs line up.

A different cutoff, resolver, threshold, or contract size can leave a gap exactly when the headline changes.

Draw both payoff tables

Write the outcome, date, source, size, and payout for each position. Do not rely on similar names or a chart that puts them next to each other.

Imagine YES in one market resolves from an official announcement while NO in another resolves from implementation. A policy headline can move both quotes while the positions still settle differently.

Measure the leftover exposure

For each scenario, calculate the combined result after fees and partial fills. Keep unmatched quantities visible. A hedge that covers 80 shares does not neutralize 100 shares.

If one leg fills first, record the temporary directional position and the price at which the second leg would stop being useful. That is part of the hedge plan, not a footnote.

Re-check the edge cases

Test cancellations, late sources, revisions, and different settlement dates. If the result depends on both markets resolving under the same interpretation, document that assumption.

The useful question is not whether two positions point in opposite directions. It is whether they pay against the same scenario, on the same timeline, in the size you can actually execute.

Further reading: Prices and order books · Resolution rules · Current fees.

Explore the markets: Open Polymarket (referral link).