Optimizing Order Execution Alpha on Polymarket

Achieving Execution Alpha via FIFO Optimization

The author focuses on gaining a technical edge in prediction markets like Polymarket by optimizing order placement speed. Because Polymarket utilizes a first-in-first-out (FIFO) matching mechanism, securing an early position in the order book ensures that an order is filled first during market volatility or price spikes. By minimizing latency, the author aims to capture fills at favorable prices, such as 1 cent, even when millions of shares are resting behind their position.

Technical Implementation Strategies

To reduce execution latency, the author utilizes AI tools like Claude Code to iterate on and optimize their trading pipeline. The following technical practices are recommended for improving order speed:

• Implement WebSockets for real-time data streams to avoid the latency overhead associated with polling.
• Pre-compute parameters and credentials to minimize processing time during the execution phase.
• Optimize server location by deploying on a VPS to reduce physical distance to the exchange servers.
• Maintain persistent HTTP connections to avoid the overhead of repeated handshakes.
• Profile signing and execution latency to identify and eliminate bottlenecks in the code.

Experimental Methodology

The author treats order execution as an iterative research problem, using AI to rapidly test and refine code performance. By focusing on high-frequency or repetitive markets like Bitcoin, the author attempts to identify patterns where a mechanical edge can be consistently applied. While the strategy does not rely on predictive accuracy, the low drawdown and potential for high-percentage returns on small capital outlays make it a viable, albeit technically demanding, approach to market participation.