Neg-Risk
Polymarket's mechanism for multi-outcome markets where exactly one outcome wins, allowing collateral to be shared efficiently across mutually exclusive outcomes.
Definition
Neg-Risk (negative risk) is a smart-contract mechanism Polymarket uses for markets with multiple mutually exclusive outcomes, such as "Which team wins the championship?" or multi-candidate elections. Instead of requiring $1 of USDC collateral per outcome per dollar bet, Neg-Risk pools collateral across all outcomes, since exactly one must win. This makes multi-outcome markets capital-efficient.
In practice
In a Neg-Risk market with four candidates, a trader holding a YES position on Candidate A is effectively short a basket of the other three candidates. The Neg-Risk contract manages this offset automatically. For bots, the practical implication is that position sizing and risk calculations differ from a pure binary: a large YES position on one outcome implicitly creates correlated exposure to all other outcomes resolving against you. Predtools bots primarily target 5-minute crypto binaries, which use standard CTF rather than Neg-Risk.