On a prediction market, you take a position on a defined outcome: a team winning, a player reaching a target or a party gaining control of Congress. The price determines what you put at risk. The contract’s rules determine what you receive. You can hold the position until settlement or try to sell it while trading remains open.
Start with a standard binary contract paying $1 for a favorable result and $0 for an unfavorable one. Buy 100 contracts at 60¢ and the purchase costs $60. A winning settlement returns $100, producing $40 profit before fees. A losing settlement returns nothing, so the loss is $60 before fees. The examples below use this structure; special settlement rules are covered later.
Taking the Yes Side
You back the condition being met. For a contract asking whether Team A wins, Yes benefits from Team A winning under the stated rules. As the market becomes more confident in that outcome, the price of the Yes position can rise.
Taking the No Side
You back the condition not being met. The wording matters in sports with draws: No on Team A winning can cover more than an opponent’s win. Check how that contract handles a draw, cancellation or other exceptional result.
An exchange matches participants’ orders, while a clearing system manages collateral and settlement. For example, Polymarket US requires sufficient collateral to cover its contracts’ maximum payout when trades execute. Platforms can represent Yes and No positions differently in their account records; the examples here describe the bettor’s economic outcome.
Browse our prediction-markets hub for provider reviews. For the practical differences from a bookmaker’s wager, see prediction markets vs. sportsbooks. Official references: CFTC event-contract explanation; Polymarket US’s market structure and collateral requirements.
Choose the Question You Want to Trade
Finding the event gets you to the menu. You still need the exact question, selection and deadline. One game can have winner, spread, total and player-performance markets; a search for “midterms” can lead you toward questions about House control, Senate control or individual races.
For a Sports Contract
Check the team or player, statistical threshold, period and overtime treatment. A first-half winner and a full-game winner are separate positions. For a prop, look at the participation requirement and what happens if the player never enters the game.
For an Election or Other Event
Check what must happen, by when, and which official source decides it. Winning an election, having the result certified and taking office are different conditions. For economic releases, the named report, measurement period and treatment of revisions can determine the outcome.
A useful example is weather: Kalshi’s daily temperature markets use the final National Weather Service climate report for the specified location. The reading on your phone may use a different station or source. The contract identifies the measurement that counts.
The app and the listing exchange can also be different businesses. DraftKings Predictions, for example, provides access to contracts from different exchanges and identifies the source in the market rules. Check that contract’s terms and the total charges shown by the service handling your order.
Official references: Polymarket US’s contract-rule structure; Kalshi’s weather settlement sources; DraftKings Predictions’ exchange and fee disclosure.
Read the Price Like Betting Odds
For a contract with a $1 winning payout, the price gives you an implied probability before fees. A 60¢ purchase corresponds to 60% and −150 American odds. A 25¢ purchase corresponds to 25% and +300. You are expressing the same risk and potential return in a different format.
| Contract price | Implied probability | American odds | Profit if 100 contracts win |
|---|---|---|---|
| 25¢ | 25% | +300 | $75 |
| 40¢ | 40% | +150 | $60 |
| 50¢ | 50% | +100 | $50 |
| 60¢ | 60% | −150 | $40 |
| 75¢ | 75% | −300 | $25 |
Prices come from the orders participants are willing to trade. News, injuries, results and new orders can move them. Treat the percentage as the probability implied by that price at that moment; the event can still resolve either way.
Quantity controls your total exposure. At 60¢, 100 contracts cost $60 before fees and can return $100 in total. Add an illustrative $2 entry fee and your outlay becomes $62, your winning profit becomes $38, and your break-even probability becomes 62% if you hold to ordinary $1-or-$0 settlement without another charge.
Provider fees differ, and some charges are already included in the quote. Our fees guide shows how to calculate the actual cost. The table above is a mathematical conversion, not a list of live offers. Reference: CFTC explanation of market-driven contract prices.
How Your Order Gets Filled
An order is your instruction to trade. A fill is the part that actually executes. The order book shows available prices and quantities, which determine whether you can complete the trade you want.
Bid, Ask and Spread
The bid is what a buyer offers; the ask is what a seller requests. If you can buy Yes at 60¢ but sell it at 58¢, that 2¢ gap is the bid/ask spread. Buying and immediately selling 100 at those prices loses $2 before fees.
Available Quantity
A 60¢ offer might cover only 20 contracts. If the next 80 cost 62¢, filling all 100 costs $61.60 before fees. That is the effect of market depth: the available quantity at each price determines your average purchase price.
Market Orders
A market order seeks the available prices. Polymarket US applies price protection based on its quote and does not leave an unfilled market order resting on the book. Execution still depends on the quantity available within the permitted price range.
Limit Orders
A buy limit sets the most you will pay; a sell limit sets the least you will accept. It can fill at that price or better. The trade-off is waiting: some or all of the order may remain unfilled, depending on its expiry and cancellation settings.
A partial fill is already a trade. Suppose you request 100 contracts at 60¢ and 40 fill. You own 40, costing $24 before fees. If the remaining 60 are resting, canceling them stops that outstanding request; you still hold the 40 already bought.
Makers leave orders that another participant later matches; takers match an existing offer. A limit order can do either, and different portions can fill in different roles. That can change the fee. Also, the two immediate Yes and No buy quotes can add up to more than $1 because of the spread, even though their standard settlement outcomes are complementary.
Official references: Kalshi’s order book; Polymarket US’s spreads, price impact and order types; Novig’s maker and taker explanation.
Hold for the Result or Sell Early
Once your purchase fills, you have a position. Holding it leaves the eventual payout to the contract rules. Selling it closes the quantity sold at the price you obtain, allowing you to realize a gain or loss before settlement.
Continue with the same illustrative purchase: 100 Yes contracts at 60¢, plus a $2 entry fee, for a $62 total cost. Assume an additional $2 fee if you sell all 100 early, no settlement charge and no funding costs.
| What happens | Amount received after exit fees | Profit or loss |
|---|---|---|
| Hold; Yes settles at $1 | $100 | +$38 |
| Hold; Yes settles at $0 | $0 | −$62 |
| Sell all 100 at 70¢; pay $2 to sell | $68 | +$6 |
| Sell all 100 at 50¢; pay $2 to sell | $48 | −$14 |
Each early-sale row assumes the entire order fills at the stated price. With these example fees, selling all 100 at 64¢ returns $62 after the sale charge, exactly breaking even. A completed sale ends your exposure on those contracts: their later settlement no longer pays you. If you sell only 40 of the 100, the remaining 60 stay exposed to the result.
To reduce an existing position, open its Sell, Close or Cash Out flow and review the quantity and net proceeds. Opposite-side orders can offset or reverse a position depending on the platform’s settings. Kalshi’s optional flip-selling feature, for example, can close what you hold and open the other side when you sell more than your current quantity.
Official references: Kalshi’s sale process and flip-selling setting. Fees in this worked example are illustrative; compare the applicable charges in our provider fee guide.
Understand the Numbers in Your Account
Your dashboard can show several amounts for the same account. Keeping them separate makes it easier to see what you own, what a sale might return and how much you can move out.
Cash Balance
Account cash changes with deposits, filled trades, fees, settlement and withdrawals. A change in an open contract’s displayed price does not by itself add cash.
Position Value
The displayed valuation of contracts you hold. It can change before you trade. An actual exit depends on the sale price, fees and quantity that fill.
Potential Payout
The amount a favorable settlement would return. Subtract your total entry cost and other applicable charges to calculate profit. A $100 payout on a $62 purchase produces $38 profit.
Withdrawable Balance
The amount the account currently allows you to transfer out. It can differ from cash because of uncleared deposits, committed funds or other account restrictions.
Kalshi also notes that a cash-out estimate can cover only part of a position when buying interest is limited. Review the quantity alongside the dollar figure. Official references: Kalshi’s portfolio and balance definitions; Polymarket US withdrawal clearance.
How the Result Becomes a Payout
The final whistle, the end of trading and the arrival of withdrawable money can happen at different times. The exchange follows the contract’s determination criteria and official source before completing settlement.
- Trading closes. Orders stop executing in that market. The scheduled close can be before or after the apparent end of the event.
- The result is determined. The exchange checks the named data source and applies the contract rules. A report, certification or final statistic may still be pending.
- Your position settles. Contracts still held receive the applicable settlement value, and the account records the result. Standard winning Yes contracts pay $1 each; losing Yes contracts pay $0.
- You request a withdrawal. Eligible cash moves through the selected payment method. Deposit clearance and withdrawal processing are separate from the event result.
Exceptional settlement can differ from a refunded sportsbook bet. Polymarket US documents contracts whose rules permit 50¢ or fair-price settlement in specified circumstances. If your 100 contracts settle at 50¢, you receive $50. Against the $62 total entry cost in our example, that is a $12 loss, assuming no additional settlement charge.
For timing or grading questions, use the market’s status, rules and trade record. If the stated determination conditions have been met but your result remains unclear, those details give support something specific to investigate.
Official references: Kalshi’s closing and settlement explanation; Polymarket US’s alternative settlement terms, settlement process and withdrawal requirements.
Spreads, Props and Combos
Event contracts can describe many of the same outcomes you recognize from a sportsbook. A total asks whether a score exceeds a number; a prop asks whether a player meets a condition. A combination joins several conditions in one position.
Familiar Selections, Contract Pricing
Novig lists spreads, totals, player props and first-five-inning baseball markets. FanDuel Predicts also offers player selections and football combinations. Match the exact threshold and rules, then use the contract price and fees to calculate your outlay and potential return.
Get the Price for the Whole Combination
Kalshi requests quotes from participants for the combo you build. Requesting a quote does not guarantee a fill. Use the complete quoted price: related selections have to be priced together. If every component settles at $1, the combo pays $1 per contract; if any settles at $0, it pays $0. Other settlement values are multiplied together to determine the payout.
Official references: Novig’s sports markets; FanDuel Predicts’ props and combos; Kalshi’s combo pricing and settlement. For a direct comparison with bookmaker wagers, see prediction markets vs. sportsbooks.
Put It Together
Start with a service available for your location and the kind of event you want to trade. Once the account is verified and funded, the trade comes down to a few concrete decisions.
- Choose the contract. Confirm the question, side, line, deadline and settlement source.
- Set your total budget. Include fees when deciding how many contracts to buy.
- Choose your order. Review the available quantity or set a limit, then check what actually filled.
- Manage the position. Hold for settlement or review a sale of the quantity you want to close. Keep track of any remaining open orders.
Book vs Market helps you compare available sportsbook and prediction-market quotes for a matching selection. Use the provider’s confirmation screen for the final price, available size, fees and contract terms.
Fees
Compare provider charges for buying, selling and moving money, with worked calculations showing their effect on profit.
Prediction Markets vs. Sportsbooks
Compare the strengths and weaknesses of contracts, state-regulated sportsbooks and offshore books for the wager you want.
Availability
Check platform and contract access for your location before choosing an account or funding a position.
Find a Provider
Browse the prediction-market directory and follow the reviews for details on each service’s trading, markets and banking.
Official documentation checked October 26, 2026. Prices, quantities and the $2 fees in the worked trade examples are illustrative.