This guide explains how positions work on the Polymarket Exchange, including the differences between long and short positions, how to calculate portfolio value, and what happens when instruments resolve.
Long vs Short Positions
Long Position (Buying)
When you buy an instrument, you take a long position:
- You pay cash to acquire shares
- You profit if the price goes up
- At resolution: if your side wins, each share is worth 1 USD
Example: You buy 100 shares at 0.60 each.
- You pay: 60
- If you win: shares resolve to 1 each = 100 (profit of 40)
- If you lose: shares resolve to 0 (loss of 60)
Short Position (Selling)
When you sell an instrument, you take a short position:
- You sell shares to another trader and receive cash immediately
- You profit if the price goes down
- A margin requirement is imposed on your account
- At resolution: if your side wins, shares are worth 0
Example: You sell 100 shares at 0.60 each.
- You receive 60 immediately (credited to your balance)
- Margin hold of 40 is imposed (100 max payout minus 60 proceeds)
- If you win: shares resolve to 0, margin released, you keep the 60
- If you lose: shares resolve to 1, you pay 100 to cover (net loss of 40)
When you short, you are selling shares to someone else and collecting those sale funds instantly. Your balance increases immediately by the sale amount.
Price Scale
Prices in the API use a price_scale multiplier that varies per instrument. You must account for this when submitting orders and reading prices.
Submitting Orders
When placing an order, multiply your desired price by the instrument’s price_scale:
price_to_submit = desired_price × price_scale
price_scale of 1000:
price_to_submit = 0.55 × 1000 = 550
Reading Prices
When reading prices from the API, divide by price_scale to get the actual dollar value:
actual_price = api_price / price_scale
price_scale of 1000:
actual_price = 720 / 1000 = 0.72
Always check the price_scale for each instrument in the reference data. Different instruments may have different scale values.
Portfolio Value Calculation
Your portfolio value is calculated as:
portfolio_value = balance + Σ(position × mark_price)
| Position Type | Sign | Contribution to Portfolio |
|---|
| Long (bought) | Positive | +quantity × mark_price |
| Short (sold) | Negative | -quantity × mark_price |
Why Shorts are Negative
A negative position represents the expected cost to close your short. If you sold 10 shares and the current mark price is 0.40, the contribution to your portfolio is:
This reflects that you would need to pay 4 to buy back those shares and close your position.
Example Calculation
| Asset | Position | Mark Price | Contribution |
|---|
| Balance | - | - | +500 |
| Instrument A | +100 (long) | 0.65 | +65 |
| Instrument B | -50 (short) | 0.30 | -15 |
| Portfolio Value | | | 550 |
Settlement & Resolution
When an instrument resolves (the event outcome is determined), positions are settled automatically.
Resolution Values
Instruments resolve to one of three values:
| Outcome | Resolution Price | Description |
|---|
| Long wins | 1.00 | The “Yes” outcome occurred |
| Short wins | 0.00 | The “No” outcome occurred |
| Tie/Cancellation | 0.50 | Event tied or was cancelled |
What Happens When a Long Wins
When you hold a long position and win:
- Netting occurs: The exchange automatically sells your shares at the resolution price (1)
- Balance increases: Your balance increases by
position × 1
Example: You hold 100 long shares, your side wins.
- Shares resolve at 1 each
- Exchange credits your balance: 100 × 1 = 100
- Your position goes to 0
What Happens When a Short Wins
When you hold a short position and win:
- No balance change: You already received the sale proceeds when you sold
- Margin released: Your buying power is restored
- No netting needed: Shares are worth 0, so there’s nothing to buy back
Example: You sold 100 shares at 0.60, your side wins.
- You already have the 60 in your balance (from the original sale)
- Shares resolve at 0 - worthless
- Margin hold of 40 is released
- Your position goes to 0, balance unchanged
This is why winning shorts don’t show a balance change at resolution - you already collected your funds when you made the sale. The win simply releases your margin and closes the position.
Checking Resolution Status
To determine if an instrument has resolved and at what price, you must use the gRPC Market Data stream.
Resolution status is not available via FIX API. You must use gRPC streaming.
How to Check
- Subscribe to the Market Data stream
- In the snapshot, look at
instrument_stats for the instrument
- Check these fields:
settlement_calculation_method = SETTLEMENT_PRICE_CALCULATION_METHOD_EVENT_TIER_1settlement_px is set (will be 0, 0.5, or 1)
When both conditions are met, the instrument has resolved at the price indicated by settlement_px.
Worked Examples
Example 1: Long Position Wins
Setup: Buy 50 shares of Instrument X at 0.40
| Step | Balance | Position | Mark Price | Portfolio Value |
|---|
| Before trade | 1,000 | 0 | - | 1,000 |
| After buying | 980 | +50 | 0.40 | 1,000 |
| Price moves to 0.70 | 980 | +50 | 0.70 | 1,015 |
| Resolution (win at 1) | 1,030 | 0 | - | 1,030 |
Example 2: Short Position Wins
Setup: Sell 50 shares of Instrument Y at 0.60
| Step | Balance | Position | Mark Price | Margin Hold | Portfolio Value |
|---|
| Before trade | 1,000 | 0 | - | 0 | 1,000 |
| After selling | 1,030 | -50 | 0.60 | 20 | 1,000 |
| Price moves to 0.30 | 1,030 | -50 | 0.30 | 20 | 1,015 |
| Resolution (win at 0) | 1,030 | 0 | - | 0 | 1,030 |
Notice that when the short wins, the balance doesn’t change at resolution - the 1,030 was already there from the sale. Only the margin hold is released and the position closes.
Example 3: Tie/Cancellation
Setup: Hold 100 long shares bought at 0.40
| Step | Balance | Position | Resolution |
|---|
| Before resolution | 960 | +100 | - |
| Resolution at 0.50 | 1,010 | 0 | Tie |
