A prediction market lets you trade on the outcome of a future event — an election, a Fed decision, a game — by buying “Yes” or “No” shares that settle at $1 if you’re right and $0 if you’re wrong.
The price of a share is the market’s estimate of how likely the outcome is. A “Yes” share trading at 60¢ means the market thinks there’s roughly a 60% chance it happens. As new information arrives, buyers and sellers move the price — so the market becomes a live, crowd-sourced probability.
If you buy “Yes” at 60¢ and the event happens, each share pays out $1 — a 40¢ profit. If it doesn’t, the share is worth $0 and you lose your 60¢. You can also sell before the event resolves, locking in a gain or loss as the price moves.
A sportsbook sets odds and takes the other side of your bet — the house profits when you lose. A prediction market is an exchange: you trade against other people, and the platform simply takes a small fee. That’s why many users see prediction markets as trading, not gambling — and why the prices are often sharper than a bookmaker’s line.
The most important thing to read before you trade is the resolution criteria — the exact rule for how a market settles. Two markets on the “same” event can resolve differently. Understanding the fine print is where careful traders gain their edge.
Last updated 2026-07-31. Not financial or betting advice.