Trading Markets

Trading markets allow participants to express their expectations about future events by buying or selling market outcomes. Instead of simply predicting an outcome, users trade positions that reflect their beliefs about the probability of an event.

Market prices change continuously as participants buy and sell outcomes, allowing the market to aggregate information and update probabilities over time.

Market Outcomes

Each prediction market contains possible outcomes that users can trade.

For example, a market may ask:

“Will Ethereum reach $5,000 by the end of the year?”

Participants can trade

• YES — the event will occur
• NO — the event will not occur

Each outcome is represented by a price that reflects the probability of the event according to the market.

Price and Probability

In prediction markets, prices represent probabilities.

For example

• YES price = 0.65
• NO price = 0.35

This means the market estimates a 65% probability that the event will occur.

As participants trade outcomes, prices adjust dynamically to reflect new information and changing expectations.

Trading Activity

Users interact with markets by buying or selling outcomes based on their expectations.

Participants may

• buy outcomes they believe are undervalued
• sell outcomes they believe are overvalued
• adjust positions as new information appears
• trade across multiple markets simultaneously

Through continuous trading activity, markets evolve to reflect the collective expectations of all participants.

Market Signals

Prediction markets generate transparent signals about future expectations.

These signals include

• changing probabilities
• market sentiment
• shifts in participant expectations
• evolving forecasts over time

By observing market activity, participants can understand how expectations about future events develop within the ecosystem.