Annualized edge
An arbitrage's net edge divided by the fraction of a year until the contracts resolve — the return on capital locked up, not just the headline percentage.
A 2% edge on a contract that settles tomorrow is a spectacular return; the same 2% on a contract that settles in 2028 locks capital for two years for less than a savings account pays. Prediction-market arbs on long-dated events are usually the second kind. ArbMonster's paper trader only takes positions whose annualized edge beats a 10% hurdle for exactly this reason.
Measured on ArbMonster: How fast opportunities close