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Update Polymarket documentation (2026-02-19)

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docs/developers/neg-risk/overview.md
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> Fetch the complete documentation index at: https://docs.polymarket.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Overview
# Negative Risk Markets
Certain events which meet the criteria of being "winner-take-all" may be deployed as **"negative risk"** events/markets. The Gamma API includes a boolean field on events, `negRisk`, which indicates whether the event is negative risk.
> Capital-efficient trading for multi-outcome events
Negative risk allows for increased capital efficiency by relating all markets within events via a convert action. More explicitly, a NO share in any market can be converted into 1 YES share in all other markets. Converts can be exercised via the [Negative Adapter](https://polygonscan.com/address/0xd91E80cF2E7be2e162c6513ceD06f1dD0dA35296). You can read more about negative risk [here](https://github.com/Polymarket/neg-risk-ctf-adapter).
**Negative risk** is a mechanism for multi-outcome events where only one outcome can win. It enables capital-efficient trading by allowing positions across all outcomes within an event to be related through a **conversion** operation.
***
## How It Works
In a standard multi-outcome event, each market is independent. If you want to bet against one outcome, you must buy that outcome's No tokens—but those No tokens have no relationship to the other outcomes.
Negative risk changes this. In a neg risk event:
* A **No share** in any market can be converted into **1 Yes share in every other market**
* This conversion happens through the Neg Risk Adapter contract
### Example
Consider an event: "Who will win the 2024 Presidential Election?" with three outcomes:
| Outcome | Your Position |
| ------- | ------------- |
| Trump | — |
| Harris | — |
| Other | 1 No |
With negative risk, that 1 No on "Other" can be converted into:
| Outcome | After Conversion |
| ------- | ---------------- |
| Trump | 1 Yes |
| Harris | 1 Yes |
| Other | — |
This is capital-efficient because betting against one outcome is economically equivalent to betting *for* all other outcomes.
## Identifying Neg Risk Markets
The Gamma API includes a `negRisk` boolean on events and markets:
```json theme={null}
{
"id": "123",
"title": "Who will win the 2024 Presidential Election?",
"negRisk": true,
"markets": [...]
}
```
When placing orders on neg risk markets, you must specify this in your order options:
```typescript theme={null}
const response = await client.createAndPostOrder(
{
tokenID: "TOKEN_ID",
price: 0.5,
size: 100,
side: Side.BUY,
},
{
tickSize: "0.01",
negRisk: true, // Required for neg risk markets
},
);
```
## Contract Addresses
Neg risk markets use different contracts than standard markets:
See [Contract Addresses](/resources/contract-addresses) for the Neg Risk Adapter and Neg Risk CTF Exchange addresses.
## Augmented Negative Risk
There is a known issue with the negative risk architecture which is that the outcome universe must be complete before conversions are made or otherwise conversion will “cost” something. In most cases, the outcome universe can be made complete by deploying all the named outcomes and then an “other” option. But in some cases this is undesirable as new outcomes can come out of nowhere and you'd rather them be directly named versus grouped together in an “other”.
Standard negative risk requires the complete set of outcomes to be known at market creation. But sometimes new outcomes emerge after trading begins (e.g., a new candidate enters a race).
To fix this, some markets use a system of **"augmented negative risk"**, where named outcomes, a collection of unnamed outcomes, and an *other* is deployed. When a new outcome needs to be added, an unnamed outcome can be clarified to be the new outcome via the bulletin board. This means the “other” in the case of augmented negative risk can effectively change definitions (outcomes can be taken out of it).
**Augmented negative risk** solves this with:
As such, trading should only happen on the named outcomes, and the other outcomes should be ignored until they are named or until resolution occurs. The Polymarket UI will not show unnamed outcomes.
| Outcome Type | Description |
| ------------------------ | ------------------------------------------------------------- |
| **Named outcomes** | Known outcomes (e.g., "Trump", "Harris") |
| **Placeholder outcomes** | Reserved slots that can be clarified later (e.g., "Person A") |
| **Explicit Other** | Catches any outcome not explicitly named |
If a market becomes resolvable and the correct outcome is not named (originally or via placeholder clarification), it should resolve to the *“other”* outcome. An event can be considered “augmented negative risk” when `enableNegRisk` is true **AND** `negRiskAugmented` is true.
### How Placeholders Work
The naming conventions are as follows:
1. Event launches with named outcomes + placeholders + "Other"
2. When a new outcome emerges, a placeholder is clarified via the bulletin board
3. The "Other" definition narrows as placeholders are assigned
### Original Outcomes
### Trading Rules for Augmented Neg Risk
* Outcome A
* Outcome B
* ...
<Warning>
Only trade on **named outcomes**. Placeholder outcomes should be ignored until
they are named or until resolution occurs. The Polymarket UI does not display
unnamed outcomes.
</Warning>
### Placeholder Outcomes
* If the correct outcome at resolution is not named, the market resolves to "Other"
* The "Other" outcome's definition changes as placeholders are clarified—avoid trading it directly
* Person A -> can be clarified to a named outcome
* Person B -> can be clarified to a named outcome
* ...
### Identifying Augmented Neg Risk
### Explicit Other
An event is augmented neg risk when both flags are true:
* Other -> not meant to be traded as the definition of this changes as placeholder outcomes are clarified to named outcomes
```json theme={null}
{
"enableNegRisk": true,
"negRiskAugmented": true
}
```
<Note>
The Gamma API includes a boolean field `negRisk` on events and markets, which indicates whether the event uses negative risk. For augmented neg risk events, an additional `enableNegRisk` field is also `true`. When placing orders, the SDK option is always `negRisk: true` / `neg_risk: True` regardless of whether the market is standard or augmented neg risk.
</Note>
## Technical Details
### Conversion Mechanics
The conversion operation is atomic and happens through the Neg Risk Adapter:
1. You hold 1 No token for Outcome A
2. Call the convert function on the adapter
3. You receive 1 Yes token for every other outcome in the event
## Resources
* [Neg Risk Adapter Source Code](https://github.com/Polymarket/neg-risk-ctf-adapter)
* [Gamma API Documentation](/market-data/overview)
## Next Steps
<CardGroup cols={2}>
<Card title="Markets & Events" icon="calendar" href="/concepts/markets-events">
Understand how multi-market events are structured.
</Card>
<Card title="Positions & Tokens" icon="coins" href="/concepts/positions-tokens">
Learn about token operations like split, merge, and redeem.
</Card>
</CardGroup>