Definition
Endgame trade
Buying outcomes priced near $1.00 close to resolution to harvest short-dated yield.
Endgame trade
An endgame trade is the purchase of one or more outcome tokens that are trading very close to $1.00 shortly before a market resolves. Traders do this to capture a small, short-dated return as the market approaches resolution — effectively selling time value for what can be a quick payout if the market resolves in the purchased outcome.
In context
On Polymarket, endgame trading typically targets outcomes priced between $0.95 and $0.99 in the days or hours before resolution. Because each outcome token redeems for $1.00 if it wins (and $0.00 if it loses), a purchase at, say, $0.98 yields an expected raw return of roughly 2% if the outcome succeeds. Endgame trades are common among speculators seeking short-term yield rather than pure arbitrage; they differ from intra-market arbitrage strategies where the sum of best asks is strictly less than $1.00.
Risks to consider
- Resolution risk: Polymarket uses UMA as its optimistic oracle. Disputes or delayed resolution can pause settlement and extend exposure.
- Catastrophe risk: Outcomes priced near $1.00 imply low probability of losing, but when unexpected information arrives the price can move to zero rapidly.
- Slippage and partial fills: Tight tick sizes and thin liquidity near resolution can cause fills at worse prices or incomplete execution.
- Fees and timing: Taker fees apply and settlement timing affects realized returns; always account for fees and the time between trade and redeem.
- Smart-contract and platform risk: CTF operations, relayer behavior, or other contract-level issues can affect the ability to split/merge/redeem.
How you see it on Polymarket
- Price signals: Endgame candidates show an outcome with a bid/ask near $1.00 and low remaining time to the market's endDate.
- Tick size: Tick size may tighten to $0.001 as prices approach extremes; the WebSocket emits tick_size_change events.
- Execution: Traders often use FAK market orders for immediate fills or limit orders at tight increments when liquidity is thin.
See also
- edge
- resolution