The basics
Each market poses a yes-or-no question — for example:“Will Bitcoin be above $90,000 on March 15?”You buy Yes or No shares based on what you think will happen.
Shares and prices
- Share prices range from $0.01 to $0.99
- The price reflects the market’s implied probability of that outcome
- Buying Yes at a given price is economically equivalent to selling No at the same price
On orderbook-based markets, the displayed Yes and No prices may not add up to exactly $1.00 — the spread between buyers and sellers creates small gaps. This is normal and reflects the market’s liquidity. In a perfectly liquid market, they’d sum to $1.00.
How payouts work
When the market resolves:- Winning shares pay out $1.00 each
- Losing shares pay out $0.00
Example: You buy 100 Yes shares at $0.40 each (cost: $40). If the event happens, you receive $100 — a $60 profit. If it doesn’t, you lose your $40 stake.
Selling before resolution
You don’t have to wait for a market to resolve. You can sell your shares at any time at the current market price. If the price has moved in your favor, you can lock in a profit early.Key terms
| Term | Definition |
|---|---|
| Share | A contract that pays $1 if the outcome is correct, $0 otherwise |
| Yes/No | The two sides of a binary market |
| Orderbook | The list of open buy and sell orders at various prices |
| Spread | The difference between the best bid and best ask price |
| Resolution | When a market’s outcome is determined and shares are settled |
Research has shown that prediction markets are among the most accurate forecasting tools available, often outperforming polls and expert panels (Arrow et al., Science, 2008).
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Where does the liquidity come from?
Polymarket, Kalshi, and more — how noma aggregates markets from multiple providers.