Prediction Market Glossary: 20 Terms You'll Actually Use
Prediction markets borrow vocabulary from finance, gambling and academic forecasting. This glossary keeps the list to the terms you will actually encounter in your first year of trading.
Core Terms
YES / NO share — the two sides of a binary contract, each paying $1 on resolution. Order book — the live list of buy and sell offers. Bid / Ask — the best current price to sell / buy. Spread — the gap between bid and ask, a proxy for liquidity.
Resolution source — the objective authority that decides the outcome. Settlement — the moment payouts are distributed. Fill — the execution of an order against existing liquidity.
Probability & Pricing
Implied probability — the market price read as a percentage. Calibration — the statistical property that events priced at X% happen X% of the time across a large sample. Slippage — the difference between the price you expected and the price you got on a market order.
Risk & Strategy
Position sizing — the fraction of your bankroll allocated to a single trade. Hedging — offsetting a position with a related trade to reduce risk. Edge — your estimated advantage over the market's implied probability.