Synth Overlay: Balance-Aware Position Sizing with Kelly Criterion (updated) #31
Description
Goal
Show the user their wallet/account balance and automatically calculate the optimal bet size for a Polymarket position based on the current edge, confidence, and Kelly Criterion — so they know exactly how much to bet, not just which direction.
User Story
A trader sees a 4pp edge on a BTC daily market with high confidence. Instead of guessing how much to bet, the side panel reads their balance, calculates the expected value of a YES/NO bet at current Polymarket prices, and shows the Kelly-optimal position size. They know immediately: "bet $X on YES for +EV."
Scope
- Read the user's balance (wallet or Polymarket account)
- Calculate expected value of YES and NO bets given Synth probability vs Polymarket price
- Show Kelly-optimal position size based on edge, confidence, and balance
- Display the recommendation clearly alongside existing edge data in the side panel
Why
Knowing there's an edge is only half the answer — knowing how much to risk is the other half. Position sizing is where most prediction market traders lose money, even when they're right on direction. This makes the tool actionable, not just informational.
Deliverables
- Working position sizing calculator in the side panel
- Demo video showing balance read + position size recommendation
- Updated 1-page technical paper (tools/synth-overlay/README.md)