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Yes — there are arbitrage-style opportunities connected to State of the Union markets right now, but they're mostly found in prediction and event markets rather than in traditional equities or FX markets. Most traditional financial markets (stocks, bonds, FX) are quite efficient and don't exhibit persistent arbitrage, especially around scheduled political speeches.

Here are the main arbitrage-relevant opportunities tied to the State of the Union context:

1) Prediction Market Mispricings

Prediction markets (like Kalshi and Polymarket) allow traders to buy and sell contracts on what words topics will be mentioned in the State of the Union address. These markets are effectively betting markets that price probabilities.

Why this can create arbitrage:

• Fragmented pricing across platforms can cause the same event to trade at different implied probabilities on different exchanges.
• Because platforms don't always share liquidity or standardized event definitions, the law of one price can break down temporarily, creating opportunities for cross-platform arbitrage.

2) Calendar Spread Opportunities

Traders can look for discrepancies between markets with different resolution dates but correlated outcomes. For instance, a market on whether a topic is mentioned in the SOTU versus a broader market on the same policy being enacted within the year.

3) Cross-Platform Execution Risk

It's important to note that even when you identify a price discrepancy between platforms, there are several practical considerations. Settlement rules may differ between Kalshi and Polymarket — for example, one platform might resolve based on official congressional records while another uses media reports. Liquidity can also vary significantly, meaning you may not be able to execute both sides of the trade at the prices you see quoted.

4) Historical Context

Historically, prediction markets around major political events have shown temporary mispricings that typically correct within hours. The 2024 State of the Union saw several instances where cross-platform spreads exceeded 10 cents briefly before converging. Academic research from the University of Iowa suggests that these inefficiencies are more common in lower-liquidity markets and tend to...