Understanding basic prediction market (forecast market) terminology makes reading any market easier. This glossary explains the ten most important terms in plain language, from Yes/No contracts to settlement and liquidity.
The basic trading unit: a contract that pays a full dollar if the outcome happens (Yes) or zero if it doesn't (No). Its price between zero and a dollar reflects the probability of the outcome.
The probability reflected by a contract's current price. A 65-cent price means the market estimates the "Yes" probability at roughly 65%.
The moment a market's outcome is finally determined per a pre-announced official source, and a full dollar is paid for every correct contract.
How easily you can buy or sell a contract at a fair price without moving the price much. More popular markets usually have higher liquidity.
The pre-announced entity or reference the outcome is settled against — like an official sports tournament source or a published financial index.
The basic trading unit: it pays a full dollar if the outcome happens, and zero if it doesn't, priced to reflect the probability.
The probability reflected by a contract's current price — a 40-cent price implies a 40% probability.
It settles automatically per a pre-announced official source decided before the market opens, with no later discretionary decision.
High liquidity means easy buying and selling at a fair price without moving it much; low liquidity may mean wider spreads.
No, there's no leverage on PolySouq — the maximum loss is capped at the contract cost only.
Disclaimer: Prediction markets are a legal and legitimate way to trade information about the outcomes of future events. However, trading carries risk and you may lose the full amount you trade — so only trade what you can afford to lose. This content is educational and is not financial or investment advice.