Polymarket Macro Event Cascade Trader

Trades 2nd and 3rd order effects from nearly-resolved Polymarket events. When a major geopolitical, crypto, or weather event resolves, downstream markets (oil, equities, crypto) take hours to fully reprice. This skill identifies the cascade chain and trades the lagging targets before they catch up.

Macro Event Cascade Trader

This is a template. The default signal trades cascade lag from nearly-resolved trigger events to downstream target markets -- remix it with real-time news feeds, order-flow data, or cross-venue latency analysis. The skill handles all the plumbing (market discovery, trade execution, safeguards). Your agent provides the alpha.

Strategy Overview

When a major event resolves on Polymarket, the repricing does not happen all at once. First-order effects (the directly related markets) reprice within minutes. But second and third-order effects -- the markets connected through economic or geopolitical transmission channels -- take hours to fully adjust.

Example cascade: Iran ceasefire resolves YES ->

1. 1st order (immediate): Geopolitics markets reprice
2. 2nd order (30min-2h): Oil drops, BTC rises
3. 3rd order (2h-8h): Equity/recession markets rise

This skill scans all markets, identifies triggers that are nearly resolved (p > 90% or p < 10%, or resolving within 24h), maps the expected cascade chain, and trades the downstream targets that have NOT yet repriced.

Edge Thesis

Prediction market participants are specialists. The person trading Iran ceasefire markets is not the same person trading BTC or oil markets. Cross-asset repricing requires information to travel between siloed participant pools. This creates a structural lag that is largest for 3rd-order effects and during off-hours when fewer participants are active.

The edge is not in predicting the trigger event. The edge is in being faster than cross-asset information flow.

Signal Logic

1. Trigger Detection

Scan all markets and identify nearly-resolved events:

• Probability > 90% or < 10% (market has effectively decided)
• Resolution within 24 hours and probability > 50% or < 50%

2. Event Classification

Classify each trigger into a category: geopolitics, crypto, commodity, health, weather, equity. For geopolitics, further classify as escalation or de-escalation.

3. Cascade Chain Mapping

Predefined cascade chains map trigger signals to expected target movements:

Trigger	2nd Order	3rd Order
Geo escalation YES	Oil UP, Crypto DOWN	Equity DOWN
Geo de-escalation YES	Oil DOWN, Crypto UP	Equity UP
Crypto milestone UP	Equity UP
Weather extreme YES	Commodity UP
Health outbreak YES	Equity DOWN, Commodity UP

4. Lag Detection

For each cascade target, measure how much it has NOT moved in the expected direction. A target sitting at 35% when the cascade says it should go UP has a lag of 15% (from the 50% midpoint). Only trade targets where lag exceeds CASCADE_LAG threshold.

5. Conviction-Based Sizing

All trades use the standard conviction formula:

• YES: conviction = (YES_THRESHOLD - p) / YES_THRESHOLD, boosted by cascade lag
• NO: conviction = (p - NO_THRESHOLD) / (1 - NO_THRESHOLD), boosted by cascade lag
• Size: max(MIN_TRADE, conviction * MAX_POSITION)

Remix Ideas

• Add real-time news API to confirm trigger events before trading cascade
• Weight cascade strength by trigger market volume (bigger trigger = stronger cascade)
• Add time-decay: cascade signal weakens as hours pass since trigger detection
• Cross-venue arbitrage: check Kalshi/Metaculus for cascade lag confirmation
• Add order-book depth analysis to estimate how much repricing is left

Safety & Execution Mode

The skill defaults to paper trading (venue="sim"). Real trades only with --live flag.

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

autostart: false and cron: null mean nothing runs automatically until configured in Simmer UI.

Required Credentials

Variable	Required	Notes
SIMMER_API_KEY	Yes	Trading authority. Treat as a high-value credential.

Tunables (Risk Parameters)

All declared as tunables in clawhub.json and adjustable from the Simmer UI.

Variable	Default	Purpose
SIMMER_MAX_POSITION	40	Max USDC per trade at full conviction
SIMMER_MIN_TRADE	5	Floor for any trade
SIMMER_MIN_VOLUME	10000	Min market volume filter (USD)
SIMMER_MAX_SPREAD	0.07	Max bid-ask spread
SIMMER_MIN_DAYS	3	Min days until resolution
SIMMER_MAX_POSITIONS	6	Max concurrent open positions
SIMMER_YES_THRESHOLD	0.38	Buy YES only if market probability <= this value
SIMMER_NO_THRESHOLD	0.62	Sell NO only if market probability >= this value
SIMMER_CASCADE_LAG	0.08	Min lag (from 50% midpoint) before trading a cascade target

Dependency

simmer-sdk by Simmer Markets (SpartanLabsXyz)

• PyPI: https://pypi.org/project/simmer-sdk/
• GitHub: https://github.com/SpartanLabsXyz/simmer-sdk