Skip to main contentPolymarket only supports fully-collateralized contracts, meaning both sides post the full amount required to cover the maximum possible payout at the time the trade is executed. No additional funds are required afterward.
What Fully-Collateralized Means
When buying and selling contracts:
- Both buyer and seller post full collateral upfront.
- Polymarket Clearing holds these funds until settlement.
- At settlement, the funds are released.
Every contract is fully-collateralized. This ensures that negative balances are impossible and payouts are guaranteed at settlement.
Example
| Participant | Funds Posted |
|---|
| Buyer | $0.40 |
| Seller | $0.60 |
| Polymarket Clearing | $1.00 |
Maximum Gain and Loss
- Maximum loss is the amount paid for the contract.
- Maximum gain is the difference between $1 and the amount paid.
- Once the trade is executed, maximum gain and loss do not change.
Example
| Position | Max Loss | Max Gain |
|---|
| Buy Yes | $0.40 | $0.60 |
| Sell Yes | $0.60 | $0.40 |
Settlement and Payout
- At settlement, Polymarket Clearing releases funds automatically.
- The winner receives $1 per contract; loser receives $0.
- No margin calls, reconciliations, or additional obligations.
Key Points
- Buyer and seller post full collateral upfront.
- Maximum gain and loss are fixed at the time of the trade.
- No additional funds are required after the trade.
- Polymarket Clearing guarantees payout.
- There are no negative balances.
