Range spreads

What a range spread is on Polymarket

A range spread is a defined-risk position built from two threshold markets on the same event and expiry — for example 'Bitcoin above $62,000' and 'Bitcoin above $64,000' on the same date. You take the lower threshold long and sell the upper one, so the structure pays when the market settles inside the band between the two strikes and returns a fixed floor when it settles outside.

Because Polymarket outcome tokens are digital — each pays $1 or $0 — the payoff is a clean step function, not the sloped payoff of a stock spread. The Workstation's builder loads the full strike ladder for a market, lets you pick the two thresholds, and shows the exact payoff before you submit.

Why it isn't a covered call

A covered call needs a linear underlying — a stock whose value moves continuously — so you can write a call against it. Polymarket has no such instrument: every token is a binary that settles at $1 or $0. So a range spread is the honest analog, not a literal covered call. It captures the same instinct — cap your upside in exchange for a defined, prepaid position — but its payoff is a capped digital band, and we label it that way rather than dressing it up as options it can't replicate.

The two legs, fully prepaid

Polymarket's order book is fully collateralized, so there is no naked shorting. Instead of selling the upper YES, you buy the upper strike's NO — economically identical, but fully prepaid. The position is therefore just two long token buys: long YES at the lower strike, long NO at the upper strike. There is no margin to post, nothing to liquidate, and your maximum loss is simply the net debit.

long YES @ $0.80  (Bitcoin above $62k)
buy  NO  @ $0.93  (Bitcoin above $64k)
  net debit = $1.73   ->  max loss = $0.73
  settles in $62k-$64k ->  payout $2.00  (profit $0.27)
  settles outside band ->  payout $1.00  (loss $0.73)

Payoff, max loss, and the $1 floor

Inside the band both legs pay, so you collect $2 per share; outside it exactly one leg pays, so you collect $1. That $1 floor is what makes the structure capped — your worst case is the debit minus the floor, fixed the moment you pay. The builder shows the per-region profit and loss, max profit, max loss, and the floor live as you move the strikes.

Which markets support range spreads

Any event with a nested threshold ladder works — Polymarket's crypto markets ('Bitcoin above ___', 'Ethereum reaches ___') are the cleanest, with many strikes at a shared expiry and oracle. The two legs must share the same event, expiry, and resolution source so the strikes are truly nested; the builder sources both from one event ladder to guarantee it. Coverage is best where ladders are liquid — typically the daily and monthly crypto markets.

Execution: atomic, with rollback

Both legs are submitted as one multi-leg ticket through the same atomic executor used across the Workstation. The legs fire sequentially; if one fails to fill, the filled leg is reversed with an opposite-side market order so you never end up holding half a spread. The whole flow is HFT-tier gated and runs against your own funded wallet.