Polymarket Macro Fear Index Trader

Builds a custom fear index from ALL Polymarket markets by aggregating geopolitical escalation, falling crypto, extreme weather, and rising disease signals into a composite score. When fear is extreme markets OVERREACT and everything gets sold -- this skill buys the most oversold markets pushed below YES_THRESHOLD by panic, not fundamentals. When fear is too low (complacency), it sells overpriced markets.

Macro Fear Index Trader

This is a template. The default signal aggregates four fear dimensions from Polymarket market probabilities -- remix it with VIX data, credit default swap spreads, or social media sentiment scores. The skill handles all the plumbing (market discovery, fear scoring, regime detection, trade execution, safeguards). Your agent provides the alpha.

Strategy Overview

Markets overreact to fear. When geopolitical tensions spike, crypto crashes, disease outbreaks emerge, and extreme weather hits simultaneously, traders panic-sell across ALL categories -- even markets that have nothing to do with the fear catalyst. This creates oversold opportunities.

This skill builds a custom fear index from Polymarket's own markets:

• Geopolitical fear (weight: 0.35): escalation probability, military action, nuclear risk
• Crypto fear (weight: 0.30): inverse of BTC/ETH bullish market probabilities
• Health fear (weight: 0.20): disease outbreak, case count escalation probabilities
• Weather fear (weight: 0.15): extreme weather event probabilities

When the composite fear index exceeds the PANIC threshold, the skill finds ALL markets below YES_THRESHOLD and buys the most oversold ones -- these have been pushed too low by indiscriminate fear selling.

Signal Logic

Step 1: Scan and Classify

All markets from get_markets(limit=200) are classified into fear categories:

Category	Keywords	Fear direction
Geo	war, invasion, escalation, nuclear, missile, sanctions	High P(escalation) = high fear
Crypto	bitcoin, ethereum, solana, above/below	Low P(BTC above X) = high fear
Health	measles, pandemic, outbreak, cases, virus	High P(cases > X) = high fear
Weather	hurricane, tornado, flood, wildfire, earthquake	High P(extreme event) = high fear

Step 2: Compute Fear Index

Each market's probability is converted to a fear score (0-1), then averaged within its category. The composite fear index is a weighted average:

text

fear_index = 0.35 * geo_fear + 0.30 * crypto_fear + 0.20 * health_fear + 0.15 * weather_fear

Step 3: Regime Detection and Trading

Regime	Condition	Action
PANIC	fear_index > 0.65	Buy YES on most oversold markets (lowest P first)
COMPLACENCY	fear_index < 0.30	Sell NO on most overpriced markets (highest P first)
NEUTRAL	Between thresholds	Fall back to standard conviction signals

Conviction Scaling

In PANIC regime:

• Base conviction from distance below YES_THRESHOLD: (threshold - p) / threshold
• Fear multiplier: 1 + min(0.5, (fear_index - FEAR_THRESHOLD) / (1 - FEAR_THRESHOLD))
• More extreme fear = more conviction that it's an overreaction

In COMPLACENCY regime:

• Base conviction from distance above NO_THRESHOLD: (p - threshold) / (1 - threshold)
• Complacency multiplier: 1 + min(0.5, (COMPLACENCY_THRESHOLD - fear_index) / COMPLACENCY_THRESHOLD)

Remix Ideas

• VIX integration: Replace or supplement crypto_fear with real-time VIX levels
• Twitter/X sentiment: Feed social media panic metrics into the geo or health fear scores
• Credit spreads: Use HY-IG spread as a financial fear component
• Google Trends: Surge in searches for "recession", "crash", "war" as additional fear signal

Risk Parameters

Parameter	Default	Notes
Max position size	$40 USDC	Per market, reached at max conviction
Min market volume	$3,000	Liquidity filter
Max bid-ask spread	10%	Avoid illiquid panic-widened spreads
Min days to resolution	7	Need time for fear to subside
Max open positions	10	Spread across many oversold markets

Installation & Setup

bash

clawhub install polymarket-macro-fear-index-trader

Requires: SIMMER_API_KEY environment variable.

Cron Schedule

Runs on demand or via automaton. Cron is set to null -- configure it in the Simmer UI when ready.

Safety & Execution Mode

The skill defaults to paper trading (venue="sim"). Real trades only execute when --live is passed explicitly.

Scenario	Mode	Financial risk
python trader.py	Paper (sim)	None
Cron / automaton	Paper (sim)	None
python trader.py --live	Live (polymarket)	Real USDC

The automaton cron is set to null -- it does not run on a schedule until you configure it in the Simmer UI. autostart: false means it won't start automatically on install.

Required Credentials

Variable	Required	Notes
SIMMER_API_KEY	Yes	Trading authority -- keep this credential private.

Tunables (Risk Parameters)

All risk parameters are declared in clawhub.json as tunables and adjustable from the Simmer UI without code changes. They use SIMMER_-prefixed env vars so apply_skill_config() can load them securely.

Variable	Default	Purpose
SIMMER_MAX_POSITION	40	Max USDC per trade (reached at 100% conviction)
SIMMER_MIN_TRADE	5	Floor for any trade (min USDC regardless of conviction)
SIMMER_MIN_VOLUME	3000	Min market volume filter (USD)
SIMMER_MAX_SPREAD	0.10	Max bid-ask spread (0.10 = 10%)
SIMMER_MIN_DAYS	7	Min days until market resolves
SIMMER_MAX_POSITIONS	10	Max concurrent open positions
SIMMER_YES_THRESHOLD	0.38	Buy YES if market price <= this value
SIMMER_NO_THRESHOLD	0.62	Sell NO if market price >= this value
SIMMER_FEAR_THRESHOLD	0.65	Fear index above this = PANIC regime
SIMMER_COMPLACENCY_THRESHOLD	0.30	Fear index below this = COMPLACENCY regime
SIMMER_GEO_WEIGHT	0.35	Weight for geopolitical fear component
SIMMER_CRYPTO_WEIGHT	0.30	Weight for crypto fear component
SIMMER_HEALTH_WEIGHT	0.20	Weight for health fear component
SIMMER_WEATHER_WEIGHT	0.15	Weight for weather fear component

Dependency

simmer-sdk is published on PyPI by Simmer Markets.

• PyPI: https://pypi.org/project/simmer-sdk/
• GitHub: https://github.com/SpartanLabsXyz/simmer-sdk
• Publisher: [e-mail]

Review the source before providing live credentials if you require full auditability.