Collateral
Polymarket US operates with fully-collateralized contracts, meaning sufficient funds are locked to cover the maximum possible payout at the time the trade is executed. No additional funds are required afterward. Buyers (Long Positions)- Pay the contract price
- No additional margin required
- Maximum loss: amount paid
- Maximum gain: $1.00 – price paid
- Receive the contract price as proceeds
- Post $1.00 margin per contract (full payout value)
- Fiat balance increases by sale proceeds
- Buying power decreases by (Payout Value – Sale Price)
- Maximum loss: $1.00 – sale price
- Maximum gain: sale price
| Participant | Cash Flow | Margin Required | Buying Power Change |
|---|---|---|---|
| Buyer | –$0.40 | $0 | –$0.40 |
| Seller | +$0.40 | $1.00 | –$0.60 |
Shorting
Shorting lets you take the opposite side of a market by selling a yes contract without owning it. You receive the sale price immediately, and margin equal to the full payout value ($1.00 per contract) is locked to cover your potential obligations at settlement.Trading Examples
Buying yes at $0.60 (Long Position)- At trade: You pay $0.60 per contract. Buying power decreases by $0.60.
- If yes wins: You receive $1.00 (P/L = +$0.40)
- If yes loses: You receive $0 (P/L = –$0.60)
- At trade: You receive $0.60 in sale proceeds. You must post $1.00 margin. Net buying power change: –$0.40.
- If yes wins: P/L = –$0.40
- If yes loses: You keep proceeds and margin is released (P/L = +$0.60)
| Action | Outcome | P/L |
|---|---|---|
| Buy yes @$0.60 | yes wins | +$0.40 |
| Buy yes @$0.60 | yes loses | –$0.60 |
| Sell yes @$0.60 | yes wins | –$0.40 |
| Sell yes @$0.60 | yes loses | +$0.60 |
Cash Flow by Position Type
- Long yes: Fiat balance decreases by the purchase cost, buying power decreases by the same amount.
- Short yes: Fiat balance increases by sale proceeds, but buying power decreases by (Payout Value – Sale Price) due to the full $1.00 margin locked per contract.
Portfolio Margin
Polymarket US applies portfolio-level margining, meaning margin requirements consider your entire set of open positions rather than treating each market in isolation. You can maintain many open positions across different markets, as long as the aggregate exposure does not exceed your available buying power.Reducing or Closing a Short
You can reduce or close a short at any time by buying back the yes contracts you sold. Your exposure decreases and proportional margin is unlocked.Liquidity
Liquidity is the size available at each price level on the order book. Where your order fills depends on how much liquidity is available at or near the best price. Liquidity comes from resting orders that other users have placed. Each price level shows how many shares are available to buy or sell. The more liquidity near the current price, the easier it is to trade without moving the price.How Orders Interact With Liquidity
Orders fill against available liquidity starting at the best available price. If there isn’t enough available at that price to fill your full order, the remaining shares fill at the next price levels, raising your average fill price.Thin Liquidity Conditions
Liquidity can become thin—or even disappear entirely—when traders pull their orders. This is especially common in live sports, including:- Late in the 4th quarter or final minutes
- Overtime
- Right after a major play (turnover, touchdown, penalty, injury)
- Right before the match ends, when the outcome looks nearly certain
Reducing Liquidity Risk
Polymarket US is a peer-to-peer market. Prices and available liquidity change as other traders place or cancel orders.- Pay close attention to the price right before you submit. In fast-moving markets, prices can change in seconds.
- Consider placing smaller orders instead of one large order to reduce the chance your order sweeps through multiple price levels.
- Be extra cautious near the end of games or matches, where liquidity often thins out or disappears.