THE COMPLETE GUIDE TO
PREDICTION MARKETS
Trade on what you know. The market is the forecast.
THE CORE CONCEPT
Prices are probabilities
In prediction markets, every price is a probability. A share trading at $0.65 means the crowd believes there's a 65% chance that event happens.
If you think it's actually 80%? That's your edge. The difference between market price and your estimate is where profit lives.
Edge = Your Probability − Market PriceTHE $1 RULE
How trades actually work
Every market has two sides: YES and NO. Together, they always equal exactly $1.00.
This isn't arbitrary—it's what makes prediction markets mathematically elegant. When YES costs $0.60, NO must cost $0.40. The market is always balanced.
Unlike sportsbooks, there's no "house" to beat. You're trading against other users. No one gets banned for winning.
THE ORDER BOOK
See the market in motion
Prediction markets use order books, just like stock exchanges. Buyers and sellers post their prices. When they match, trades happen. Watch how supply and demand form the probability in real-time.
THE MATH THAT MATTERS
Three numbers every trader should know
Before placing any bet, smart money calculates: Expected Value, Break-Even, and Position Size. Here's how—and tools to do it instantly.
MULTI-OUTCOME MARKETS
When there are more than two outcomes
Who will win the Super Bowl? Which party wins the Senate? Multi-outcome markets add complexity—and opportunity.
The key rule: All outcomes must sum to ~100%. When they don't? That's where arbitrage lives.
If all outcomes sum to 105%, the extra 5% represents market inefficiency—the cost of liquidity. Unlike sportsbooks, prediction markets don't take a fee; this is simply slippage from buying all outcomes. Lower overround = more efficient market.
RISK SIMULATION
See your future(s)
What happens to your bankroll over 100 bets? 1,000 bets? With your edge and sizing? Run simulations and see the range of outcomes. This is how pros think about variance.
ADVANCED TOOLS
Lock in profits, manage risk
Already have a position? Market moved in your favor? Calculate exactly how to hedge for guaranteed profit or convert between odds formats.
FOLLOW THE SMART MONEY
Learn from the whales
We track 300+ top traders across politics, sports, crypto, and more. See how they position. Learn what they know. This isn't theory—it's real trades, happening now.
READY TO TRACK WHALES?
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