# Neg-risk

Also written negRisk, NegRisk, negative risk, neg risk market, augmented negative risk.

*https://predictionmarkets.tools/glossary/neg-risk · next to Prediction Market Data APIs*

**Definition:** Polymarket's structure for an event with several mutually exclusive outcomes, built as a group of ordinary YES/NO markets of which exactly one resolves YES. An adapter contract lets a holder convert NO shares in some outcomes into YES shares in all the others plus cash, which ties the separate order books together. APIs flag membership as negRisk, and orders and conversions go to different contracts.

A question with one winner out of many — an election, a championship, a central-bank decision with
five possible moves — looks on Polymarket like one market with a list of outcomes. Underneath it is
a stack of separate binary markets, one per outcome, each with its own YES token, NO token and
order book. Neg-risk is the name for the machinery that makes the stack behave like one market,
and the flag every tool reading Polymarket data has to check before it adds, signs or redeems
anything.

## How it works

**The equivalence it exploits.** Polymarket's adapter README gives the canonical example: an
election with candidates A, B and C, one binary market each. A position of one NO on A and one NO
on B is worth 1 USDC if A wins, 1 if B wins and 2 if C wins — exactly the same as 1 USDC plus one
YES on C. Because only one outcome can win, those two positions are interchangeable, and the
`NegRiskAdapter` contract performs the swap.

**The conversion.** In the adapter's own notes: if a market has *n* questions and you convert an
amount of *m* NO tokens, you receive that amount times *m − 1* in collateral, plus the same amount
of YES in each of the outcomes you did not hold NO on. The NO tokens are burned. Polymarket's
concept page states the one-outcome case as "a No share in any market can be converted into 1 Yes
share in every other market". The adapter has an optional fee rate on conversion, paid to a vault
contract; whether a given market charges it is a market parameter, not a constant.

**Why the prices sum to about one.** Exactly one YES in the group pays a dollar, so a full set of
YES tokens is worth exactly a dollar at settlement. If the best asks across every outcome add up to
less than that, buying one of each locks in the difference before fees. If the bids add up to more,
buying a NO on every outcome and converting all of them returns *n − 1* dollars immediately rather
than at resolution. The conversion is what makes the second trade release cash now, and the two
together are what hold the sum close to one. Close is not equal: reading the 40 open Polymarket
events with the most 24-hour volume on 4 October 2026, nine were flagged `negRisk`, and their YES
`outcomePrices` summed to between 0.92 and 1.07. Spreads, thin books on long-shot outcomes and
fees all sit in that gap.

**Augmented neg-risk.** Plain neg-risk needs every outcome known at creation. The augmented form
adds named outcomes, unnamed placeholder outcomes that can be assigned later — a candidate who
enters the race — and an explicit "Other". Polymarket's documentation says to trade only named
outcomes, that its interface hides unnamed ones, and that "Other" changes meaning each time a
placeholder is clarified. The adapter README says why "Other" has to exist: a neg-risk group in
which every question resolves NO, or two resolve YES, cannot be resolved cleanly.

## Why it matters here

**It is a field you have to read, not a detail you can ignore.** Gamma returns `negRisk`,
`negRiskMarketID` and `negRiskRequestID` on each market, and `enableNegRisk` and
`negRiskAugmented` on the event; the CLOB returns `neg_risk` on the order book and answers a
dedicated `GET /neg-risk` lookup by token ID. Membership is a market-level property, augmentation
an event-level one, so a tool needs both reads to know whether to show placeholders. The
[Gamma API](https://predictionmarkets.tools/tools/polymarket-gamma-api) and [CLOB API](https://predictionmarkets.tools/tools/polymarket-clob-api) cards cover
the endpoints.

**Orders go to a different contract.** Polymarket's order-placement guide uses the book's
`neg_risk` value to choose the exchange contract that is the order's EIP-712 verifying contract:
one address for standard markets, another — the Neg Risk CTF Exchange — for neg-risk ones. Splits,
merges and redemptions likewise go to a separate neg-risk collateral adapter. A client that hard-codes
the standard path produces signatures and calls aimed at the wrong contract. This is why the
[Polymarket CLI](https://predictionmarkets.tools/tools/polymarket-cli) has a separate `ctf redeem-neg-risk`, and why the
[Limitless SDK](https://predictionmarkets.tools/tools/limitless-sdk) card notes that Limitless's NegRisk groups take a different
order path from its plain markets.

**Profit and loss needs a correction.** A conversion moves value with no counterparty and no
trade: NO tokens disappear, YES tokens and cash appear. A wallet tracker that reads only fills sees
a position vanish at no price. [OrcaLayer](https://predictionmarkets.tools/tools/orcalayer) labels its win rates NegRisk-corrected
for this reason, and [PolyTaxes](https://predictionmarkets.tools/tools/polytaxes) lists neg-risk conversions as their own
transaction type in its cost-basis matching. The
[volume guide](https://predictionmarkets.tools/guides/why-two-dashboards-disagree-on-volume) explains why conversions are kept out
of turnover by the people who measure it carefully.

**Summing an event is not a sanity check you can skip.** A dashboard that adds every market Gamma
returns for an augmented event includes placeholders and an "Other" whose definition has drifted.
The total will not be one, and nothing is wrong with the venue.

**The name says nothing about risk.** "Negative risk" describes the capital efficiency of the
conversion — a position against one outcome is the same as a position on all the others — not a
position that cannot lose. Every leg of a neg-risk group is still an ordinary
[conditional token](https://predictionmarkets.tools/glossary/conditional-token) that pays zero if it is wrong.

## Where you will meet this

- [Limitless API](https://predictionmarkets.tools/tools/limitless-api.md)
- [limitless-sdk](https://predictionmarkets.tools/tools/limitless-sdk.md)
- [OrcaLayer](https://predictionmarkets.tools/tools/orcalayer.md)
- [poly-maker](https://predictionmarkets.tools/tools/poly-maker.md)
- [Polymarket CLI](https://predictionmarkets.tools/tools/polymarket-cli.md)
- [PolyTaxes](https://predictionmarkets.tools/tools/polytaxes.md)

## Sources

1. [Polymarket Multi-Outcome Markets (neg-risk-ctf-adapter), README and NegRiskAdapter notes](https://github.com/Polymarket/neg-risk-ctf-adapter) — Polymarket, 2026-01-08
2. [Negative Risk Markets](https://docs.polymarket.com/concepts/negative-risk) — Polymarket, read 2026-10-04
3. [Place Orders](https://docs.polymarket.com/trading/place-orders) — Polymarket, read 2026-10-04
4. [Market Details](https://docs.polymarket.com/market-data/market-details) — Polymarket, read 2026-10-04
5. [Contracts](https://docs.polymarket.com/resources/contracts) — Polymarket, read 2026-10-04
6. [Gamma API events endpoint, 40 open events by 24-hour volume](https://gamma-api.polymarket.com/events?closed=false&limit=40&order=volume24hr&ascending=false) — Polymarket, read 2026-10-04

*Last updated 2026-10-04. A reference page, corrected in place — not a dated post.*