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Understanding the Data

How to Calculate APR on a Polymarket Position

Last updated 2026-03-10

APR on a Polymarket outcome is the annualized return from buying at the current price and holding to a $1 payout, calculated as ((1 / price) - 1) * (365 / days to resolution). It is a ranking heuristic, not a return forecast, and it inflates sharply as expiry approaches.

Prediction market outcomes on Polymarket trade between $0 and $1 and settle at exactly $1 or $0. That makes an annualized yield comparison possible: buying a YES share at $0.92 that resolves in 30 days returns roughly 8.7% over those 30 days, which annualizes to about 106%. PolyLab computes this figure for every outcome row so markets with different expiry dates can be ranked against each other.

Exact formula

The current implementation computes APR with the formula:

((1.0 / price) - 1.0) * (365.0 / days)

Where days is the positive number of days between the current snapshot time and end_date.

Preconditions

APR is only computed when price is greater than 0 and less than 1.

The backend also requires:

  • end_date is present
  • snapshot_at is present
  • end_date is later than snapshot_at

If those conditions do not hold, APR stays null.

When APR is null

APR is intentionally null when:

  • price <= 0
  • price >= 1
  • the market has no usable end date
  • the market is expired at the snapshot time
  • the date math fails to produce a positive duration

Why the formula looks this way

The formula expresses a simple annualized return from buying an outcome at price and assuming a terminal payout of 1.0 if that outcome resolves correctly. It is a ranking heuristic, not a simulation of fees, slippage, or partial exits.

Short-duration annualization can overstate weak setups

APR gets mechanically larger as days gets smaller. A market with only a few hours left can show a very large annualized number even if the real-world trade is mediocre or difficult to execute.

This is why APR should almost never be read alone. Pair it with:

  • spread
  • liquidity
  • expiry
  • market structure

Storage versus fallback computation

The scraper writes APR into active_market_outcomes during snapshot creation. The API also contains a fallback APR expression so older database snapshots without an apr column can still serve the field.

Interpretation guidance

  • Use APR as a sorting aid, not as a proof of value.
  • Ignore APR on rows that are obviously too close to expiry to execute comfortably.
  • Treat APR as especially fragile in thin markets and long-shot markets.