prediction-markets-analysis
Generate deep research reports on prediction market events using the Octagon Prediction Markets Agent. Combines real-time Kalshi market data with AI-driven analysis to surface price drivers, compare market vs. model probabilities, and identify potential mispricings across 120+ active markets.
What this skill does
# Prediction Markets Analysis Generate comprehensive research reports on prediction market events using the Octagon Prediction Markets Agent. This skill combines real-time Kalshi market data with AI-driven analysis to identify mispricings, surface price drivers, and provide actionable trading insights. ## Prerequisites Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See [references/mcp-setup.md](references/mcp-setup.md) for installation instructions. **Note**: Report generation requires Octagon Plus, Pro, or Enterprise subscription (3 credits per report). Cached reports are free for all users. ## Core Functionality The Prediction Markets Agent provides: | Capability | Description | |------------|-------------| | Market vs. Model Probability | Computes independent model probability and compares against live market price | | Event-Driven Research | Identifies key claims, catalysts, and decision-flipping events | | Historical Resolution Tracking | Surfaces past resolution outcomes for context on base rates | | Contract Snapshot | Returns live bid/ask spreads, last traded price, volume, and open interest | | Cross-Category Coverage | 120+ active markets across Politics, Economics, Crypto, Sports, Entertainment, Science & Tech, Climate | ## Model Variants | Variant | Description | Use Case | |---------|-------------|----------| | `octagon-prediction-markets-agent` | Default. Returns cached report if available, otherwise generates new | General use | | `octagon-prediction-markets-agent:cache` | Always retrieves cached report | Fastest response, may not be latest | | `octagon-prediction-markets-agent:refresh` | Always generates fresh report | Most up-to-date, takes several minutes | ## Example Queries ### Federal Reserve Policy ``` Analyze this Fed decision prediction market: https://kalshi.com/markets/kxfeddecision/fed-meeting/kxfeddecision-26jun ``` ### Cryptocurrency Price Range ``` Research this Bitcoin price prediction market: https://kalshi.com/markets/kxbtcminy/how-low-will-bitcoin-fall-this-year/kxbtcminy-27jan01 ``` ### Sports Matchup ``` Analyze this NHL playoff prediction market: https://kalshi.com/markets/kxnhleast/eastern-conference-championship/kxnhleast-26 ``` ### Entertainment Awards ``` Research this Grammy nomination market: https://kalshi.com/markets/kxgrammynomsoty/grammy-nominees-for-song-of-the-year/kxgrammynomsoty-69 ``` ### IPO Timing ``` Analyze when SpaceX will IPO: https://kalshi.com/markets/kxipospacex/when-will-spacex-ipo/kxipospacex ``` ### Force Fresh Report ``` Generate a fresh report (bypass cache) for: https://kalshi.com/markets/kxbtcminy/how-low-will-bitcoin-fall-this-year/kxbtcminy-27jan01 ``` ## Example Response Structure ```markdown ## Market Overview - **Event**: Fed Decision June 2026 - **Resolution Date**: June 18, 2026 - **Current Market Price**: 72% (Hold rates) - **Model Probability**: 68% - **Mispricing Signal**: Market slightly overpriced ## Price Drivers 1. **Recent Economic Data**: CPI trending lower, supporting rate hold 2. **Fed Communications**: Dovish tone in recent FOMC minutes 3. **Labor Market**: Unemployment stable at 4.1% ## Key Catalysts | Date | Event | Potential Impact | |------|-------|------------------| | June 10 | CPI Release | High - could shift probabilities 5-10% | | June 12 | FOMC Statement | Medium - language on future path | ## Historical Resolution Context - Last 6 meetings: 4 holds, 2 cuts - Model accuracy on this series: 78% ## Contract Details | Outcome | Bid | Ask | Last | Volume | OI | |---------|-----|-----|------|--------|-----| | Hold | 0.71 | 0.73 | 0.72 | 15,234 | 89,000 | | Cut 25bp | 0.18 | 0.20 | 0.19 | 8,456 | 45,000 | | Hike | 0.08 | 0.10 | 0.09 | 2,100 | 12,000 | ## Recommendation **Slight Sell** on Hold contract. Model sees 4% overpricing. Consider waiting for CPI data before positioning. ``` ## Market Categories The agent covers 120+ active markets across: | Category | Example Markets | |----------|-----------------| | **Politics** | Elections, legislation, executive actions | | **Economics** | Fed decisions, inflation, employment data | | **Crypto** | Bitcoin/Ethereum price ranges, ETF approvals | | **Sports** | Championship outcomes, playoff matchups | | **Entertainment** | Awards shows, box office, streaming | | **Science & Tech** | Space launches, AI milestones, IPO timing | | **Climate** | Temperature records, hurricane landfalls | ## Use Cases ### Identify Mispricings Compare crowd consensus against model-derived probability to find trading opportunities. ### Pre-Trade Research Research key drivers behind a prediction market price before placing a trade. ### Catalyst Monitoring Monitor upcoming events that could move contract prices. ### Event Analysis Get structured, sourced research on fast-moving events in politics, finance, and beyond. ## Historical Data Access Use the `prediction_markets_history` tool to fetch historical data: ``` Fetch historical data for prediction market ticker KXFEDDECISION-26JUN from January to June 2026 ``` Parameters: - `ticker`: Market ticker symbol - `captured_from`: Start date filter - `captured_to`: End date filter - `limit`: Number of records - `cursor`: Pagination cursor ## Integration with Other Skills Combine with other Octagon skills for comprehensive analysis: | Skill | Integration Use | |-------|-----------------| | `earnings-call-analysis` | Analyze CEO comments relevant to prediction market events | | `sec-8k-analysis` | Track material events that could impact market outcomes | | `stock-performance` | Correlate stock moves with prediction market probabilities | ## Analysis Tips 1. **Check model vs. market spread**: Larger spreads suggest potential mispricings 2. **Monitor catalyst calendar**: Know when decision-flipping events are scheduled 3. **Review resolution history**: Past accuracy provides context for current probabilities 4. **Consider liquidity**: Check volume and open interest before sizing positions 5. **Use cache wisely**: Use `:cache` for quick checks, `:refresh` before trading 6. **Cross-reference sources**: Combine prediction market analysis with fundamental research ## Supported Platforms - **Kalshi**: Full support for all active markets - **Polymarket**: Coming soon ## For More Markets Browse the full list of supported markets at [octagonai.co/markets](https://octagonai.co/markets).
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