diff --git a/common/contract.ts b/common/contract.ts
index f75cfa4b..8427c84b 100644
--- a/common/contract.ts
+++ b/common/contract.ts
@@ -94,6 +94,9 @@ export type outcomeType = AnyOutcomeType['outcomeType']
 export type resolution = 'YES' | 'NO' | 'MKT' | 'CANCEL'
 export const RESOLUTIONS = ['YES', 'NO', 'MKT', 'CANCEL'] as const
 export const OUTCOME_TYPES = ['BINARY', 'FREE_RESPONSE', 'NUMERIC'] as const
+
 export const MAX_QUESTION_LENGTH = 480
 export const MAX_DESCRIPTION_LENGTH = 10000
 export const MAX_TAG_LENGTH = 60
+
+export const CPMM_MIN_POOL_QTY = 0.01
diff --git a/functions/src/place-bet.ts b/functions/src/place-bet.ts
index 3de47aef..26678f24 100644
--- a/functions/src/place-bet.ts
+++ b/functions/src/place-bet.ts
@@ -2,7 +2,7 @@ import * as admin from 'firebase-admin'
 import { z } from 'zod'
 
 import { APIError, newEndpoint, validate } from './api'
-import { Contract } from '../../common/contract'
+import { Contract, CPMM_MIN_POOL_QTY } from '../../common/contract'
 import { User } from '../../common/user'
 import {
   BetInfo,
@@ -81,8 +81,13 @@ export const placebet = newEndpoint(['POST'], async (req, [bettor, _]) => {
       }
     })()
 
-    if (newP != null && !isFinite(newP)) {
-      throw new APIError(400, 'Trade rejected due to overflow error.')
+    if (
+      mechanism == 'cpmm-1' &&
+      (!newP ||
+        !isFinite(newP) ||
+        Math.min(...Object.values(newPool ?? {})) < CPMM_MIN_POOL_QTY)
+    ) {
+      throw new APIError(400, 'Bet too large for current liquidity pool.')
     }
 
     const newBalance = user.balance - amount - loanAmount