How to Read Prediction Market Odds and Share Prices

Switching from a sportsbook to a prediction market app can be a little awkward. Instead of the usual +/- values, you now see percentages and cents, which, while familiar, can seem unusual without context.

So let’s walk you through the whole thing. We’ll go over Yes/No shares, convert cents and percentages to traditional American odds, explain payouts, and finish things off with a few practical examples.

By the time you finish reading, everything will make sense, and you’ll start using prediction markets with zero confusion.

Understanding Yes and No Shares

With prediction markets, you’re guessing whether something will happen or not, which some platforms express through Yes/No options.

Let’s take the price of Ethereum as an example. You can:

• Buy Yes that the price of ETH will be $2,320 or above by 10 a.m.

• Buy No that the price of ETH will be $2,320 or above by 10 a.m.

If the price ends up being $2,321 or higher, Yes wins; if the price is $2,319 or lower, No wins. Make a correct prediction, and you get paid.

For sports, things can differ depending on the platforms you’re using. 

Polymarket keeps it simple, letting you choose which team will win, along with other popular options like spreads and totals.

On Kalshi, however, you may see the same Yes/No format as for other categories. For instance, a baseball game between Boston and Detroit may feature the following options:

• Buy Yes on Detroit to win

• Buy No on Detroit to win

• Buy Yes on Boston to win

• Buy No on Boston to win

Now, this can seem a bit confusing in and of itself. If you’re buying “Yes” on Detroit to win, you simply get a payout if Detroit wins. But if you buy “No” on Boston to win, you also get paid out if Detroit wins (Boston does not win). 

So, why are there multiple options for the same thing?

Well, these are separate markets, not two sides of a single shared order book, and the potential pricing mismatch is where prediction markets can get interesting.

Expanding on our example, let’s say that “Yes” on Detroit to win trades at 46¢, but “No” on Boston to win (which is essentially the same thing) trades at 45¢.

That 1¢ gap is basically market friction, not a contradiction. It can be caused by a few forces, but the main thing to understand is that these are separate liquidity pools, as each contract has its own buyers and sellers. If more people are trading “Detroit Yes” than “Boston No,” prices can drift slightly apart.

The Math Behind the Price: Cents to Percentages

Instead of odds, prediction markets price everything in cents, and those cents double as probability.

Each contract is worth $1 if you’re right, $0 if you’re wrong. So, if a contract costs 75¢ and you win, your profit will be 25¢ per contract.

Of course, you’re not limited to one contract, so you can scale up for a higher potential payout. If you buy 10 contracts at 55¢, you’re paying a total of $5.50. If your prediction is right, those contracts settle at $10.

The percentage is just the price expressed as a probability: 60¢ means a 60% chance, 25¢ means a 25% chance, etc.

So instead of odds like +150, where you must do some manual calculations, you’re directly seeing what the market thinks the chances are.

Keep in mind that this is market-implied probability, and not any sort of guarantee. Just like odds at a sportsbook, prices can move with time based on trading activity and any changes that may influence the outcome.

Converting Share Prices to Traditional American Odds

Share prices tell the same story as American odds, just expressed differently.

Whereas +/- distinguishes between underdogs and favorites, all US prediction markets use percentages and cents on the dollar.

So, if a contract costs 25¢, it implies a 25% chance, and you’ll be risking 25¢ to win $1. If we scale that up, you’ll win $300 on every $100, which is the same as +300 odds.

60¢ (60%) means you risk $1.50 to win $1. So, if you want to win $100, you have to put down $150, which mirrors -150 odds on a sportsbook.

Navigating the Bid and Ask Spread

Since prediction markets pit you against other users rather than the platform itself, you should consider the differences between bidding and asking prices.

A bid is essentially the highest price someone is willing to pay, while an ask is the lowest price someone is willing to sell for. The gap between can be viewed as a bid-ask spread.

So, you see a market where someone asks for 52¢ per contract, but you’re only willing to bid 48¢. You now have the option to take the asking price immediately or place your bid and wait for someone to accept it, which may or may not happen. 

Therefore, you can view the 4¢ spread as the cost of immediacy.

Tighter spreads of only 1¢ or 2¢ usually mean high liquidity and efficient pricing, while wider spreads signal lower activity and more room to negotiate your entry price.

How Payouts Work: The One Dollar Resolution

Every contract on a prediction market platform costs between $0.01 and $0.99. If your prediction is correct, you get $1 per contract. If you’re wrong, you don’t win anything. That’s the entire system.

There’s no hard cap on how many contracts you can buy, but you’re limited by liquidity. In other words, there has to be someone on the other side willing to sell at your price.

Once you buy, you don’t have to wait for the event to finish; you can also sell your contracts later at a different price once they move. If you buy a contract at 40¢ and the market later moves to 50¢, you can sell early and lock in a 10¢ profit.

As for costs, there’s no vig built into the odds like at a sportsbook, but there are still fees you may need to pay. The size of these fees depends on the platform’s fee structure, whether you’re buying or selling, or whether you’re taking an existing price or placing your own orders.

Practical Trading Examples

These examples show how prediction market trades work in practice, including how profits or losses are calculated.

Example 1

• Gas prices in the United States at the end of this month (Apr. 30 @ 5 a.m.)

  • Above 4.10 (Yes): 34¢ (34% chance)

  • Above 4.10 (No): 67¢ (67% chance)

• You put $30 on Yes.

• For that amount, you’re buying 89 contracts at 34¢ each.

• If the prediction is correct, your payout is $89 ($59 profit).

• If your prediction is wrong, you lose the $30.

Example 2

• Denver Nuggets to beat Minnesota Timberwolves

  • Yes: 74¢

  • No: 28¢

• You buy 50 contracts on No.

• Your cost is $14 (50 x 28¢).

• If the prediction is correct, your payout is $50 ($36 profit).

• If the prediction is wrong, you lose the $14.

Example 3

• You buy Yes that the US-Iran nuclear deal will be finalized before June.

• You buy 100 contracts at 50¢ per contract.

• The price increases to 61¢ per contract.

• You sell all of your 100 contracts at the new price.

• Your profit is $11 (11¢ per contract).