Glossary
Prediction market terms, explained.
45 terms you’ll meet on Polymarket, Kalshi and PredictDesk, in plain English, with an example where it helps.
- Arbitrage
- Buying both sides of the same outcome on two platforms when the prices add up to less than $1, so you get $1 back whichever way it goes. It only works if both markets settle on the same result under the same rules, and the gap is bigger than the fees.
- Yes 46¢ on Polymarket + No 51¢ on Kalshi = 97¢ for a $1 payout: 3¢ before fees
- See also Price gap, Fees, ResolutionPrice gaps in Compare
- Ask
- The lowest price anyone is selling at right now. It’s what you pay when you buy straight away.
- See also Bid, Spread, Order book
- Bid
- The highest price anyone is offering to buy at right now. It’s what you get when you sell straight away.
- See also Ask, Spread, Order book
- Binary market
- A market with two outcomes, Yes and No. The two prices add up to about $1, because exactly one side will pay out.
- Will the Fed cut rates in December? Yes 38¢ · No 62¢
- See also Yes, No, Multi-outcome market
- Calibration
- How closely prices match what actually happens. In a well-calibrated market, outcomes priced at 70¢ come true about 70% of the time.
- See also Implied probability, Edge
- CFTC
- The Commodity Futures Trading Commission, the US regulator for futures and event contracts. Kalshi operates as an exchange regulated by the CFTC.
- See also Event contract, KYC
- Close time
- When trading in a market stops. The result can be confirmed and paid out later, once the resolution source reports it.
- See also Resolution, Resolution sourceMarkets resolving soon
- Edge
- The difference between your own estimate of the probability and the price. If you think something has a 60% chance and it trades at 52¢, you see an 8-point edge.
- See also Expected value (EV), Implied probability
- Event
- The real-world question a group of markets is about, such as who wins a race. Each possible answer trades as its own Yes/No market inside the event.
- See also Multi-outcome market, Series
- Fees
- What a platform charges per trade. Kalshi’s standard taker fee is highest for prices near 50¢; Polymarket charges no trading fee on most markets. Kalshi’s formula is 7% × P × (1 − P) per contract, rounded up to the cent. Some markets on either platform use other rates, and deposits or withdrawals can cost extra.
- Kalshi, 100 contracts at 50¢: 7% × 100 × 0.50 × 0.50 = $1.75
- See also Maker and taker, ArbitrageFees compared
- Implied probability
- The chance a price implies. A share at 64¢ means the market puts the outcome at about 64%. A correct share pays $1, so the price in cents reads directly as a percentage. That’s why we show prices as probabilities.
- 64¢ → 64%
- See also Odds, Calibration, YesLive probabilities
- KYC
- Short for “know your customer”: the identity checks a platform runs before you can trade or withdraw. Kalshi requires them for every account; elsewhere it depends on where you live.
- See also CFTC
- Limit order
- An order to buy or sell at a set price or better. If nobody matches it right away, it waits in the order book until someone does or you cancel it.
- See also Market order, Maker and taker, Order book
- Liquidity
- How much you can trade without moving the price. A liquid market has tight spreads and plenty of size at the best prices.
- See also Spread, Slippage, Volume, Market maker
- Maker and taker
- A maker adds a resting order to the book; a taker fills an order that is already there. Trading fees, where they apply, usually fall on takers.
- See also Limit order, Market order, Fees
- Market maker
- A trader, often a firm, that keeps quoting both a bid and an ask. They earn the spread and in return keep the market liquid.
- See also Liquidity, Spread
- Market order
- An order that fills immediately at the best prices available. It’s fast, but in a thin book a large one can fill at worse prices than you expect.
- See also Limit order, Slippage
- Mid price
- The point halfway between the best bid and the best ask: a fair snapshot of where a market stands when the last trade is stale.
- Bid 47¢ · Ask 49¢ → mid 48¢
- See also Bid, Ask, Spread
- Movers
- The markets whose price changed the most in the last 24 hours, in percentage points. A big move usually means news is being priced in.
- See also Implied probability, VolumeToday’s biggest moves
- Multi-outcome market
- A question with several possible answers, such as who wins a primary. Each answer trades as its own Yes/No market, and their Yes prices add up to about 100%.
- See also Binary market, Event
- No
- The side that pays $1 if the outcome does not happen. Buying No at 30¢ is the same view as selling Yes at 70¢.
- See also Yes, Binary market
- Odds
- Another way of writing a price. Decimal odds are $1 divided by the price; American odds show the profit on a $100 stake, or the stake you need to win $100.
- 25¢ = 25% = 4.00 decimal = +300 American
- See also Implied probability, Payout
- Open interest
- The value of all positions that are open and not yet settled. Rising open interest means new money is coming into a market, not just changing hands.
- See also Volume, Liquidity
- Oracle
- The mechanism that reports a real-world result to a market so it can pay out. Most Polymarket markets resolve through UMA’s Optimistic Oracle: a proposed result becomes final unless someone disputes it within a set window.
- See also Resolution, Resolution source
- Order book
- The live list of every open buy and sell order at each price. It shows how much you could trade right now, and at what prices.
- See also Bid, Ask, Liquidity, SpreadOrder books in the dashboard
- P&L
- Profit and loss. Unrealized P&L is what your open positions are worth at today’s prices; realized P&L is locked in once you sell or the market resolves.
- See also Position, PayoutPortfolio and P&L
- Payout
- What a winning share pays when the market resolves: $1 per share, in USDC on Polymarket and in US dollars on Kalshi. A losing share pays nothing.
- 100 Yes shares at 40¢ cost $40 and pay $100 if Yes wins
- See also Share, Resolution, USDC
- Position
- The shares or contracts you hold in a market, such as 200 Yes shares bought at 41¢. You can close it any time before resolution by selling.
- See also P&L, Hedging
- Prediction market
- A market where people trade on the outcome of real events. Each outcome has a price between $0 and $1 that works as the crowd’s estimate of its probability. Polymarket and Kalshi are the two biggest. A correct share pays $1 when the market resolves.
- Fed cuts in December? Yes 38¢ → a 38% chance
- See also Implied probability, Share, Event contract
- Price gap
- The difference between the price of the same outcome on Polymarket and on Kalshi, in percentage points. A gap means one platform sells the outcome for less.
- Polymarket 54% · Kalshi 51% → a gap of 3 points
- See also Arbitrage, FeesBiggest gaps right now
- Resolution
- The moment a market’s outcome is decided and winning shares pay $1. The market’s rules say exactly what counts and which source decides. Read the rules before you trade: two markets with the same title can resolve differently.
- See also Resolution source, Oracle, Close time, PayoutResolution calendar
- Resolution source
- The source named in a market’s rules that settles the result, such as the official election count or the government’s inflation report.
- See also Resolution, Oracle
- Series
- On Kalshi, a recurring family of markets with the same rules, such as every Fed rate decision or a city’s daily high temperature.
- See also Event, Ticker
- Slippage
- The difference between the price you expected and the average price you got, because a large order used up the best prices and filled at worse ones.
- See also Market order, Liquidity, Order book
- Spread
- The gap between the best bid and the best ask. The tighter the spread, the less it costs to get in and out of a market.
- Bid 47¢ · Ask 49¢ → a 2¢ spread
- See also Bid, Ask, Liquidity, Price gap
- Strike
- The threshold in an above-or-below market, such as “Will inflation be above 3%?”. Each strike trades as its own Yes/No market.
- See also Series, Binary market
- Volume
- How much has been traded in a market, usually over the last 24 hours. Polymarket reports it in dollars; Kalshi counts contracts, each worth up to $1.
- See also Liquidity, Open interest, MoversVolume by topic and platform
- Yes
- The side that pays $1 if the outcome happens. Its price is the market’s implied probability of the outcome.
- See also No, Implied probability
Stop guessing.Read the market.Stop guessing. Read the market.
Join free in 60 seconds. Go Pro only when you want the full edge.