How to Read Prediction Market Prices in 2026: Prices, Probabilities, and Market Movements

What are prediction markets?

Just as it’s important to know what event trading is if you want to trade events, before using prediction market platforms, it’s crucial to know how they work.

Prediction markets are straightforward ‘Yes/No’ questions, which could be anything from ‘Will the Green Bay Packers win the 2027 Super Bowl?’ to ‘Will Donald Trump say the word immigration in his next public address?’.

As previously mentioned, each outcome will be given a number between 0 and 100, which represents the probability of it happening according to market makers. So, a price of 90 means that there is a roughly 90% chance of something happening. The two sides of any given market should add up to 100, although this may not be the case in the event of low market liquidity.

As you might expect, the larger the price (and, therefore, the probability of something happening), the more money you would need to trade to make your target profit.

Prediction markets are completely legal in the US

As prediction markets are federally regulated by the CFTC, they are completely legal throughout the US, provided you are at least 18 years of age. The meaning of CFTC is the Commodity Futures Trading Commission, and they regulate futures contracts, which means that a prediction market trade is legally a futures contract.

How prediction market odds work

When you trade a prediction market, you purchase contracts, with each contract costing $1 minus the odds. So, if you purchase 100 contracts with odds of 50, they would cost $50.

All successful prediction market contracts then settle at the monetary equivalent of 1.00 and are again based on the probability. So, $50 worth of contracts return a total of $100 (your $50 purchased contracts plus a $50 profit) because the chance of winning was 50/50.

All prediction market trades that are incorrect settle at 0 and lose the entire cost of the contracts, irrespective of the probability.

The table below provides a few more examples:

When considering prediction markets vs sportsbooks, this odds format is probably the biggest difference. Sportsbook markets in the US use a baseline of $100 with a positive or negative figure that could be anything from -101 to +10,000 or even beyond.

A minus figure, such as -150, is the amount a user has to bet to make a $100 profit if successful. A positive figure, such as +200, is the amount a user will make if they successfully bet $100.

Other key considerations at prediction market platforms

For ease of understanding, we didn’t take into account any fees when displaying the potential returns from trades using prediction markets. However, there are fees applied, which can be a small percentage of winning trades or a small percentage of all trades. The latter option may see the percentage fee differ depending on whether you are a market maker (the person offering the odds) or a market taker.

The second key consideration is that not all prediction markets add up to 100, as true probabilities do. This is generally down to low liquidity, meaning that one or both sides of the market don’t have any market makers offering the ‘true’ price. In this scenario, you should be wary of trading (especially if the market odds add up to 105 or more) as there’s a good chance that the prices offered will not be a true reflection of the probability of the outcomes happening.

How to read market prices as probabilities: Pros and cons

Pros and Cons

• Odds of 0-100 makes reading the probability easy
• Straightforward winning settlement of 1.00
• Straightforward losing settlement of 0

• You also need to account for fees
• Low liquidity can distort markets

Make sure you know your probabilities when trading prediction markets

Just because prediction market platforms are fully regulated in the US, it doesn’t mean that you should spend money on them without gaining a full understanding of how they work first.

All prediction market prices (regardless of subject) are displayed as probabilities, with your potential returns based on these probabilities. So, for example, a price of 50 means a theoretical 50% chance, which means that you can double your money if successful. A price of 10 gives you the chance to make nine times your money if successful. And so on and so forth.

Once you’ve gotten your head around this, you should be able to get a clear picture of whether or not you believe any prediction market contracts are worth purchasing. If you think that they are, then you can find out more and get started today by clicking any of the banners on this page.

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How to read market prices as probabilities: FAQs