# PolyEdge — Polymarket 5-Min BTC Binary Algo

## Strategy: Fair Value Mispricing + Volatility Edge

Unlike Hedge-Mart (recovery grid on continuous price), PolyEdge exploits
mispriced binary options on Polymarket's 5-minute BTC markets.

### Core Concept
A "Will BTC be above $X in 5 min?" binary option has a mathematical fair value:
- Based on: current price, strike, realized volatility, time remaining
- Fair value = Normal CDF of (distance-to-strike / expected-5min-move)
- When Polymarket price ≠ fair value → trade the mispricing

### Edge Sources
1. **Vol Model** — Our 5-min realized vol is more accurate than crowd pricing
2. **Momentum Adjustment** — Short-term momentum shifts fair value before market reacts
3. **Mean Reversion** — Extreme prices (>0.85 or <0.15) often overshoot
4. **Kelly Sizing** — Optimal bet sizing based on edge magnitude

### Architecture
- `config.py` — Strategy parameters
- `fair_value.py` — Binary option pricing model
- `signals.py` — Signal generation (mispricing detection)
- `risk.py` — Position sizing, Kelly, bankroll management
- `backtest.py` — Backtest engine using historical BTC M5 data
- `polymarket_api.py` — Polymarket CLOB API wrapper (for live)
- `run_backtest.py` — CLI to run backtests

### Minimum Account
- Recommended: $500-1,000
- Absolute minimum: $200 (tight Kelly, small bets)