Black-Scholes on Polymarket: Finding Mispriced Binary Events with Python

Polymarket is a decentralized prediction market where participants bet on binary outcomes — "Will MSFT close above $420 by Friday?" trades as a contract paying $1 if true, $0 if false. What most participants miss is that this structure is mathematically identical to a cash-or-nothing binary option — an instrument that the Black-Scholes framework has priced analytically for over 40 years. When two markets price the same event using fundamentally different methodologies, mispricings emerge. This a