Prediction Market Answer Library

An expert-curated answer library for prediction markets, designed for fast insight, real-world decision-making, and market-intelligence workflows.

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Fundamentals

How do I calculate expected value (EV) for a trade in a prediction market?

EV compares what you expect to win on average vs what you pay. For a $1 “Yes” contract: EV = (your probability × $1) − price − fees.

Fundamentals

What is liquidity, and why does it matter so much in prediction markets?

Liquidity determines how easily you can trade without moving the price. Low liquidity increases spreads, slippage, and exit risk.

Pricing & Probabilities

How do I read a prediction market price as a probability?

For a standard binary contract, the price roughly equals the implied probability. A $0.73 price suggests about a 73% chance, assuming normal liquidity and rules.

Fundamentals

What is a prediction market, and how is it different from betting?

A prediction market is a marketplace where prices represent the crowd’s implied probability of a future event. Unlike traditional betting (fixed odds set by a bookmaker), prediction market prices move dynamically based on supply and demand.

Prediction Market Answer Library

How do I calculate expected value (EV) for a trade in a prediction market?

What is liquidity, and why does it matter so much in prediction markets?

How do I read a prediction market price as a probability?

What is a prediction market, and how is it different from betting?

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Resources

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