Polymarket US operates with fully-collateralized contracts, meaning sufficient funds are locked to cover the maximum possible payout at the time the trade is executed. No additional funds are required afterward.Documentation Index
Fetch the complete documentation index at: https://docs-polymarket-us.mintlify.app/llms.txt
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How Collateral Works
When a trade executes at a given price: Buyers (Long Positions)- Pay the contract price
- No additional margin required
- Maximum loss: amount paid
- Maximum gain: $1.00 – price paid
- Receive the contract price as proceeds
- Post $1.00 margin per contract (full payout value)
- Fiat balance increases by sale proceeds
- Buying power decreases by (Payout Value – Sale Price)
- Maximum loss: $1.00 – sale price
- Maximum gain: sale price
| Participant | Cash Flow | Margin Required | Buying Power Change |
|---|---|---|---|
| Buyer | –$0.40 | $0 | –$0.40 |
| Seller | +$0.40 | $1.00 | –$0.60 |
Maximum Gain and Loss
Once a trade is executed, maximum gain and loss are fixed and do not change regardless of subsequent price movements. For a contract trading at $0.40:| Position | Max Loss | Max Gain |
|---|---|---|
| Buy (Long) | $0.40 | $0.60 |
| Sell (Short) | $0.60 | $0.40 |
Settlement and Payout
At settlement, Polymarket Clearing releases funds automatically:- Winners receive $1.00 per contract
- Losers receive $0
- No margin calls, reconciliations, or additional obligations
- Seller keeps: $0.40 proceeds
- Margin released: $1.00
- Total return: $1.40
- Net profit: $0.40
- Seller’s $1.00 margin → paid to buyer
- Seller keeps: $0.40 proceeds
- Net loss: $0.60
Key Points
- Buyers post the purchase price; sellers post $1.00 margin per contract.
- Maximum gain and loss are fixed at the time of the trade.
- Sellers receive sale proceeds but must post full payout value as margin.
- Polymarket Clearing guarantees payout from the seller’s locked margin.
- There are no negative balances or margin calls.