How to read market prices pros and cons
Pros and cons
- Easy way to read probabilities
- Simple way to make predictions
- Legal in the US
- Can be confusing for newbies
How to read market prices in prediction markets
This is a key element of your prediction market education, but before we look in detail we need to cover the basics, starting with how prediction markets work. Prediction markets, sometimes called event markets, let you trade on the outcome of a real world event. This is explained in more detail in our
what are event predictions
guide, but in simple terms you buy a yes or no contract and the price reflects the market’s feeling on whether the event will or will not happen.
Finding a legal prediction market
If you are curious about whether all of this is legit, the answer is yes.
Prediction markets are legal
in the US currently, but only those overseen by the Commodity Futures Trading Commission (CFTC) are legit for you to sign up with, and for most users there is a choice between two leading platforms.
- Kalshi
– here you fund your account using FIAT currency, essentially USD and the contracts settle for $1 if correct or 0 if you are wrong. It has been authorized by the CFTC for a while, and for some users is seen as the market leader.
- Polymarket
– on the other side of the
Kalshi vs Polymarket
debate is a platform which has only just been authorized by the CFTC, after a history of regulatory scrutiny. It operates in a similar fashion, but here you are funding your account with USDC, so a better choice for those who are already crypto savvy.
How to read market prices as probabilities
As prediction markets on both these platforms work by pricing yes and no contracts between 1c and 99c, the higher the ‘yes’ price, the more likely the market thinks the event will happen. That means a ‘yes’ contract priced at 60c in essence means that the market thinks the event has a 60% chance of occurring. If the event does happen, that contract is worth $1, if it doesn’t it’s worth nothing.
These prices are not set in stone, in fact they can move frequently when influenced by outside events. Here’s a quick example so you can see at a glance how it all works:
| Market |
Yes price |
Implied probability |
| Will Seattle win the Super Bowl? |
$0.42 |
42% |
| Will JD Vance win the election? |
$0.67 |
67% |
How to read market prices for trading contracts
So if you buy a yes contract at one of the
best prediction market sites
(you can buy as many as the market will allow) on JD Vance at 67c, and he wins, you’ll get $1. If they lose, that contract is worthless. If you think the real world probability is greater than 67%, then it looks like good value, but if you think that’s too high, you should move on or wait for the price to move closer to your estimate.
The movement of prices also means you can trade these contracts before they resolve. In the example above, if the market moves so that the ‘yes’ contract for JD Vance was now pierced at 87c, you could sell the contracts you paid 67c for and you have made a profit. On the other hand, if things move the other way and it looks like JD Vance might lose, you could sell before the price hits zero and at least mitigate your loss. When this is done with sporting events, it can look similar to sportsbook activity, but this is not the case. This
prediction markets vs sportsbooks
comparison can confuse some users, but it is not the same thing, as the companion guides on this platform will illustrate.
Learn how to read market prices at prediction markets before you start
Prediction markets can look confusing but once you understand the market prices it becomes a whole lot simpler. In a nutshell the price at Kalshi, Polymarket and other platforms where contracts are in the 1c to $1 price range reflects the probability of the event happening according to the market, so a 42c price = 42% probability. Once you get that, you can see what contracts are a good buy, which to avoid and which could be worth trading if events change. Now you know how it all works, you can get started any time you are ready, with the links on this page taking you to exactly where you need to go.
Our unbeatable prediction sites
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How to read market prices as probabilities FAQs
📈 Is reading market prices at prediction markets easy?
It might look confusing at first, but when you realise the price and probability are the same, it all becomes easier, so a 42c price for a yes or no contract means it has a 42% chance of happening according to that market.
💵 What are prediction market contracts worth if they are correct?
Correct prediction market contracts on platforms like Polymarket and Kalshi are worth $1 if correct, but worthless if you are wrong.
📝 Can you sign-up with prediction markets in the US?
Yes, prediction markets in the US are legit as long as they have been authorized by the CFTC – so always check the small print before registering.
