Trading volume can be real activity and still tell an incomplete story

A market reports a large trading volume. The number looks like money pouring in. But turnover can count the same capital more than once.

If a position changes hands repeatedly, volume rises even when the amount of capital at risk does not rise by the same amount.

Define the measure

Is the figure share count, dollar notional, or collateral movement? Are buys and sells counted once or separately? Which contracts and time period are included?

Without those definitions, two volume charts may not be comparable.

Investigate suspicious patterns carefully

Repeated trades between related addresses, unusual price patterns, and bursts around incentives can justify further investigation. They do not automatically prove wash trading.

Address clustering can be wrong. Market makers can legitimately trade often. A research method should explain its assumptions and show how results change when those assumptions change.

Add other measures

Look at spread, available depth, distinct participants, open positions, and activity that persists after a promotion. No single metric answers every question.

This article does not assign a wash-trading percentage to Polymarket. A defensible estimate would need a reproducible dataset, clear labels, and a discussion of false positives.

Volume is useful context. Treat it as a starting measurement, then ask what kind of activity produced it.

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

Explore the markets: Open Polymarket (referral link).