Trading tool · Prediction markets
Build a prediction market calibration tracker before you trust any price.
A prediction market calibration tracker built with Super Algo Kit measures how well prices match how often events actually happen. It uses reliability tables and Brier scores, and it is one of the kit's default prediction-market deliverables. Trading is optional: only a documented bias, such as overpriced longshots, that survives fees, and only after an eligibility check for your country.
strategy facts
Prediction-market calibration and the favourite-longshot bias
- Kind
- A measurement tool first; an optional strategy only in buckets declared in advance
- Markets
- Prediction markets, such as Kalshi and Polymarket, where you are eligible to trade
- Timeframe
- Daily, with prices taken at fixed times before resolution, such as 30 days and 1 day
- Evidence grade
- B: the favourite-longshot bias is long documented; tradability on current venues is unproven (C)
- Status
- Literature: published, untested by the kit
- Data needed
- Prices at decision times, outcomes and dates, fees, book depth and groupings of related markets
- Eligibility
- Checked by country and state first; the kit never helps get around a venue's restrictions
From the kit's own card. Not investment advice.
Paper first
Test it before you trade it.
Super Algo Kit runs inside the coding agent you already use. It interviews you, writes the spec with pass marks set first, then builds, backtests and paper-tests. Real money starts only when you type the authorize command.
The plan, step by step
Tick them off as you go.
What is prediction market calibration?
A price of 0.20 on a yes-or-no contract implies a 20% chance. The tracker groups resolved markets by implied probability and compares each group's average price with how often its events really happened. It also computes the Brier score, a 1950 method for checking probability forecasts.
Betting markets have long overpriced longshots and underpriced favourites, the favourite-longshot bias. Studies of prediction markets found prices reasonably well calibrated overall, with a longshot bias for events far from resolution.
Calibration tracker rules in plain words
The tracker comes first, and trading is optional. Any trading rule is declared before testing.
- Collect resolved markets with prices at fixed times before resolution.
- Bucket by implied probability and compare price with realised frequency.
- Report reliability tables and Brier scores.
- Declare in advance which buckets would be traded, and at what gap.
- Optional: trade only declared buckets, held to resolution and sized small.
What the evidence says, and where it breaks
The favourite-longshot bias is long documented in betting markets, so the kit grades the idea B. Whether it can be traded on current venues is unproven, which the kit rates C. A strategy is only as good as the bias it finds after fees.
Samples per bucket are small, especially at extreme probabilities where the bias should live. Many contracts on one election or one match are not independent observations. Selling longshots means rare, large losses.
How Super Algo Kit tests a calibration strategy, eligibility first
The prediction-markets pack asks which venue and entity you would use, and whether it accepts customers from your country and state. Super Algo Kit never helps get around a block, for example with a VPN or someone else's account. Live trading waits for a confirmed eligibility check.
Related markets are clustered before sample sizes are counted, and each bucket rule counts as a trial. Fees on winnings, capital locked until resolution and resolution disputes go into the test. The paper run uses live order-book data and sends no orders.
Before you rely on it
Where it fails.
- Small samples per bucket, especially at extreme probabilities.
- Correlated markets on one event are not independent observations.
- Selling longshots is short-tail exposure: rare, large losses.
- Fees on winnings and capital locked until resolution remove small edges.
- Market design and the participant mix change over time and differ by venue.
- Resolution disputes can delay payouts.
FAQ
Calibration tracker: questions.
What is the favourite-longshot bias?
The favourite-longshot bias is the long-documented tendency of betting markets to overprice unlikely outcomes and underprice likely ones. Explanations include risk-loving bettors and people misjudging small probabilities. Super Algo Kit grades the bias B, but rates its tradability on current venues C.
Are prediction market prices accurate probabilities?
Studies found prediction market prices reasonably well calibrated overall, with a longshot bias for events far from resolution. A calibration tracker built with Super Algo Kit measures this on the markets you choose, using reliability tables and Brier scores.
Can I build a Polymarket or Kalshi bot strategy from calibration?
Only after an eligibility check for your country and state, because access differs by venue, entity and location. Super Algo Kit never helps get around a venue's restrictions. If you are eligible, a calibration strategy trades only pre-declared buckets where a bias survives fees, sized small and paper first.
Why is selling longshots in prediction markets risky?
Selling a longshot is short-tail exposure: most of the time little happens, but a rare win by the longshot brings a large loss. Super Algo Kit caps loss per market and per event, and caps capital locked until resolution.
Is this legal advice about prediction markets?
No. Super Algo Kit's prediction-markets pack is not legal, tax or investment advice, and US rules were being rewritten in 2026. Confirm anything that matters with the venue, your regulator or a qualified professional. Trading for others or selling access may need registration or a licence, so the kit asks for a professional's confirmation first.
Keep reading
More guides.
Prediction markets · Exchange APIKalshiSuper Algo Kit helps you build a Kalshi trading bot or research tool inside your own AI coding agent.
Prediction markets · Venue APIPolymarketSuper Algo Kit helps you build a Polymarket trading bot or research tool inside your AI coding agent.Claude Code · Coding agentClaude CodeSuper Algo Kit turns Claude Code into an algo trading team, so you can build your own Claude Code trading bot.Sources the kit's card cites
- Snowberg and Wolfers (2010). Explaining the Favorite-Long Shot Bias: Is it Risk-Love or Misperceptions? Journal of Political Economy.
- Page and Clemen (2013). Do Prediction Markets Produce Well-Calibrated Probability Forecasts? The Economic Journal 123(568).
- Brier (1950). Verification of forecasts expressed in terms of probability. Monthly Weather Review.
- Wolfers and Zitzewitz (2004). Prediction Markets. Journal of Economic Perspectives.
Build it with Super Algo Kit.
15 specialist roles and 35 skills inside your coding agent. Paper first, live only when you say.
Super Algo Kit is development software. It is not investment advice, a signal service or a promise of performance. Trading involves substantial risk, including the loss of all capital you trade with.