Prediction Market Price as Probability: How to Read It
Read a prediction market price the way traders do: 65¢ means a 65 % chance, the other side costs 35¢, and a winning share pays $1 after settlement.
A price in cents is the market's estimate of probability. A share at 65¢ means the market gives that outcome a 65 % chance, and the opposite side trades at 35¢. After the event settles, a winning share pays $1 and a losing share pays nothing. Everything else in prediction markets follows from those two sentences.
What a price in cents says
Take a market at 25¢. The market puts the chance of that outcome at 25 %, so one in four events priced this way should happen. You buy shares at that price, and $10 gives you 40 of them.
If the outcome happens, each share pays $1 and your 40 shares become $40. If it does not, the shares expire at zero. The price you paid was the market's odds, and your $10 bought the difference between those odds and the result.
Why a winning share pays $1
Every share settles at either $1 or nothing, and that fixed dollar is what puts price and probability on the same scale.
That fixed payout is what makes the arithmetic work in reverse. A price of 25¢ on a $1 payout implies a 25 % chance, because paying 25¢ four times to win $1 once breaks even. Traders price the risk, and the dollar converts their price into a percentage you can read at a glance.
The other side of the price
Every market has two sides, and they add up to $1. Yes at 65¢ puts No at 35¢. Buying No at 35¢ and buying against Yes at 65¢ describe the same position.
Read both numbers before you enter. The side you disagree with tells you what you are being paid to take on. A 92¢ favorite pays 8¢ for taking the other side, which is the market saying that surprise costs it almost nothing to insure.
Formats you will meet
Most markets ask a Yes or No question about a named event. Some ask which of several outcomes happens, and each outcome trades as its own market with its own price. Sports events carry lines built the same way, with the live score on the event page and a LIVE mark while the match runs. Crypto sessions run on short clocks, in five and fifteen minute rounds.
The format changes the question, and the reading stays the same. Price in cents, probability in percent, one dollar at settlement.
What moves the price before the close
Other traders move it. A prediction market has no house setting odds and no margin built into the line. You trade against another participant who took the other side, and the price is wherever the two of you agreed.
News moves prices through those trades. A poll, a goal, a central bank statement: each one changes what participants think, and their orders push the price. The market at 65¢ this morning and 80¢ this evening had people buying Yes in between.
Why the screen price and your fill differ
The price you see is the midpoint between the best buy and the best sell quote. Your fill comes from the order book, which holds every resting buy and sell order with its price and size.
In Market mode the terminal takes the book as it stands when you press the button, and fills your order against the volume available. A large order eats through several price levels and pays a worse average than the top line. The Liquidity block under the trade panel shows the book and the spread, which is the gap between the best buy and the best sell. That gap is the round trip cost of your position before the event resolves anything.
When you can sell early
A position is not locked until settlement. You can sell your shares while the market trades and take the result at the price of the moment.
This is the practical difference from a fixed stake. Buy at 30¢, watch the news go your way, and you can sell at 55¢ without waiting to learn whether the event happens. Your profit came from the move in probability rather than from the outcome.
What happens at settlement
The event finishes and the market resolves to one outcome. Winning shares become $1, losing shares become nothing, and the price stops moving.
The payout waits for you. Press Claim in the wallet or on the event page, and the terminal credits $1 for each winning share. Until you do, the position stays visible in Positions.
Settlement follows the wording of the question rather than the spirit of it. A market on a leader leaving office by a date pays on that date and that office, whatever the news feels like on the day. Read the question before you trade any market whose phrasing is doing work.
The Results tab keeps the record afterwards: date, market, stake, profit and loss, return on investment, and whether the position won, lost or was sold.
Where the market admits it does not know
The Undecided preset in the screener collects markets where both sides trade between 40 and 60 cents. Those markets are the ones with the least consensus, and the ones where a correct read is worth the most.
Near 50¢ the market is close to a coin flip by its own estimate. Near 95¢ the market is close to certain, and your reading has to beat a crowd that already agrees. Both ends are tradable, and they ask different things of you.
Fast markets and slow ones
Two other presets sort by speed. Top movers holds markets whose price changed by more than a tenth over an hour, which points at news arriving right now. Closing soon holds markets resolving within 24 hours, where the price has little time left to drift.
A price that moved 15 points in an hour is a different object from one that sat still for a week. The first is a crowd repricing in public, and the second is a crowd with nothing new to say.
How to check your own reading
The Price vs. win block in Analytics puts your entry prices against how often you won. Buy twenty markets at 30¢ and around six should come in. Win two, and the market read those prices better than you did.
This check needs volume before it says anything. A handful of trades tells you about luck, and a few dozen start telling you about calibration. Run it on your own record rather than on the markets you remember.
A price is an estimate, not a promise
The number on the screen is what people trading today believe, priced in cents. Markets have been wrong, and a 90¢ favorite loses one time in ten by its own arithmetic.
That is the honest version of the tool. A prediction market gives you a public, live estimate with money behind it, and the estimate is only as good as the people making it. Your edge comes from finding the prices where those people are wrong, and the Price vs. win block tells you whether you are the one finding them.
Your first read
Open the Pulse terminal and pick the Undecided preset. Choose one market, write down your own percentage before you look at the price, then compare the two numbers. Trade the gap for $1 if you have one, and check the same market against your note after it settles.
