> ## Documentation Index
> Fetch the complete documentation index at: https://docs.polygon.technology/llms.txt
> Use this file to discover all available pages before exploring further.

# Polymarket hedging of operational risk

> Take small-dollar Polymarket positions to hedge regulatory, market, or event-driven risk from the CLI.

A business faces real exposure to events it cannot control: a regulatory decision that would force a product change, a rate move that swings demand, a sporting outcome that drives ad inventory pricing. Traditional risk desks cannot hedge most of these because the instruments are not on regulated venues. Polymarket's CLOB does have them. The Agent CLI ships first-class Polymarket support, discover markets, fund a proxy wallet, place CLOB buys and sells, list positions, cancel orders, under the same dry-run + broadcast safety model as every other write command.

This is small-dollar tactical hedging. Treat it the way a finance team treats a corporate hedging program: bounded notional, explicit policy, recorded receipts.

**Who this is for:**

* Strategy and risk teams piloting event-driven hedges that traditional desks do not offer
* Companies with measurable exposure to regulatory, election, or macro outcomes
* Operations teams hedging supply-chain, demand, or weather risk against published markets

***

## How it works

<div style={{border:"1px solid #C8CFE1",borderRadius:"12px",overflow:"hidden",marginBottom:"24px"}}>
  <div style={{background:"linear-gradient(180deg,#EAE4F5 0%,#F6F3FB 100%)",borderBottom:"1px solid #D5C4F2",padding:"10px 16px",fontSize:"11px",fontWeight:"700",color:"#670DE5",letterSpacing:"0.06em",textTransform:"uppercase"}}>Hedge cycle</div>

  <div style={{borderBottom:"1px solid #EEF0F9",padding:"9px 16px",display:"flex",alignItems:"center",gap:"10px"}}>
    <span style={{color:"#929EBA",fontSize:"11px",fontWeight:"700",minWidth:"16px",textAlign:"right"}}>1</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>Operator</span>
    <span style={{color:"#670DE5",fontWeight:"700"}}>→</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>CLI</span>
    <span style={{fontFamily:"'Geist Mono',ui-monospace,monospace",fontSize:"12px",color:"#141635"}}>polygon-agent polymarket markets --search "rate cut"</span>
  </div>

  <div style={{borderBottom:"1px solid #EEF0F9",padding:"9px 16px",display:"flex",alignItems:"center",gap:"10px"}}>
    <span style={{color:"#929EBA",fontSize:"11px",fontWeight:"700",minWidth:"16px",textAlign:"right"}}>2</span>
    <span style={{background:"#EAE4F5",color:"#670DE5",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"700",whiteSpace:"nowrap"}}>CLI</span>
    <span style={{color:"#670DE5",fontWeight:"700"}}>→</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>Operator</span>
    <span style={{fontSize:"13px",color:"#141635"}}>Lists active markets by volume with conditionId</span>
  </div>

  <div style={{borderBottom:"1px solid #EEF0F9",padding:"9px 16px",display:"flex",alignItems:"center",gap:"10px"}}>
    <span style={{color:"#929EBA",fontSize:"11px",fontWeight:"700",minWidth:"16px",textAlign:"right"}}>3</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>Operator</span>
    <span style={{color:"#670DE5",fontWeight:"700"}}>→</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>CLI</span>
    <span style={{fontFamily:"'Geist Mono',ui-monospace,monospace",fontSize:"12px",color:"#141635"}}>polymarket clob-buy \<conditionId> YES 25 (dry-run)</span>
  </div>

  <div style={{borderBottom:"1px solid #EEF0F9",padding:"9px 16px",display:"flex",alignItems:"center",gap:"10px"}}>
    <span style={{color:"#929EBA",fontSize:"11px",fontWeight:"700",minWidth:"16px",textAlign:"right"}}>4</span>
    <span style={{background:"#EAE4F5",color:"#670DE5",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"700",whiteSpace:"nowrap"}}>Smart wallet</span>
    <span style={{color:"#670DE5",fontWeight:"700"}}>→</span>
    <span style={{background:"#EAE4F5",color:"#670DE5",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"700",whiteSpace:"nowrap"}}>Proxy wallet</span>
    <span style={{fontSize:"13px",color:"#141635"}}>On broadcast: funds proxy, places CLOB buy</span>
  </div>

  <div style={{borderBottom:"1px solid #EEF0F9",padding:"9px 16px",display:"flex",alignItems:"center",gap:"10px"}}>
    <span style={{color:"#929EBA",fontSize:"11px",fontWeight:"700",minWidth:"16px",textAlign:"right"}}>5</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>Operator</span>
    <span style={{color:"#670DE5",fontWeight:"700"}}>→</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>CLI</span>
    <span style={{fontFamily:"'Geist Mono',ui-monospace,monospace",fontSize:"12px",color:"#141635"}}>polymarket positions / orders to monitor</span>
  </div>

  <div style={{padding:"9px 16px",display:"flex",alignItems:"center",gap:"10px"}}>
    <span style={{color:"#929EBA",fontSize:"11px",fontWeight:"700",minWidth:"16px",textAlign:"right"}}>6</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>Operator</span>
    <span style={{color:"#670DE5",fontWeight:"700"}}>→</span>
    <span style={{background:"#EEF0F9",color:"#48526F",padding:"2px 8px",borderRadius:"4px",fontSize:"11px",fontWeight:"600",whiteSpace:"nowrap"}}>CLI</span>
    <span style={{fontFamily:"'Geist Mono',ui-monospace,monospace",fontSize:"12px",color:"#141635"}}>polymarket sell ... when the position resolves or rotates</span>
  </div>
</div>

Polymarket uses a separate EOA key for CLOB signing, imported once via `polymarket set-key`. The proxy wallet needs a one-time `polymarket approve --broadcast` before the first buy. Both are one-time setup steps; subsequent hedges are a single `clob-buy` followed by `positions` and `sell` when the position rotates.

***

## Get started

Two one-time steps before the first hedge: import an EOA private key for CLOB signing via `polymarket set-key`, then run `polymarket approve --broadcast` to authorize the proxy wallet. After that, the cycle is `markets` to discover, `clob-buy` to enter, `positions` to monitor, `sell` to exit.

### Install

```bash theme={null}
npm install -g @polygonlabs/agent-cli
polygon-agent setup --name "hedging-desk"
polygon-agent wallet create --usdc-limit 5000

# One-time Polymarket setup
polygon-agent polymarket set-key 0xYOUR_EOA_PRIVATE_KEY
polygon-agent polymarket approve --broadcast
```

The smart wallet funds the Polymarket proxy on each buy. Size `--usdc-limit` to match the maximum notional you intend to hedge.

### Drive it from an LLM

```text theme={null}
Read https://agentconnect.polygon.technology/SKILL.md and find the top 5 Polymarket markets on Fed rate decisions resolving in the next 90 days. Show me the YES/NO prices and the implied probabilities, then place a $50 YES hedge on the market most aligned with a rate cut.
```

### Run the commands directly

```bash theme={null}
# Discover markets by keyword
polygon-agent polymarket markets --search bitcoin --limit 5

# Take a YES position with $25 USDC at market price (dry-run, then broadcast)
polygon-agent polymarket clob-buy <conditionId> YES 25
polygon-agent polymarket clob-buy <conditionId> YES 25 --broadcast

# Monitor and exit
polygon-agent polymarket positions
polygon-agent polymarket sell <conditionId> YES 50 --broadcast
```

Full reference: [Polymarket](/payment-services/agentic-payments/cli/polymarket).

***

## Implementation

<CardGroup cols={2}>
  <Card title="Polymarket" icon="chart-line" href="/payment-services/agentic-payments/cli/polymarket">
    Full command reference: `markets`, `clob-buy`, `sell`, `positions`, more.
  </Card>

  <Card title="Setup and wallets" icon="key" href="/payment-services/agentic-payments/cli/setup-and-wallets">
    The smart wallet funds each Polymarket buy.
  </Card>

  <Card title="Balances and funding" icon="wallet" href="/payment-services/agentic-payments/cli/balances-and-funding">
    Keep USDC available before placing orders.
  </Card>

  <Card title="Transfers" icon="paper-plane" href="/payment-services/agentic-payments/cli/transfers">
    Move USDC into the smart wallet before the first hedge.
  </Card>
</CardGroup>