Prices are signals — settlement is the contract.
Understanding mechanics protects you from shiny interfaces with weak rules. This pairs with what is a prediction market and the top prediction markets ranking.
1. Outcome shares
Most markets quote Yes/No shares between $0 and $1. Buying Yes at $0.40 risks $0.40 per share to make $0.60 if the event resolves Yes (before fees).
2. Order books and AMMs
Some venues use order books; crypto protocols may use automated market makers. Both need depth. Wide spreads destroy theoretical edge.
3. Resolution
Who settles the market — an exchange committee, an oracle, a news wire? Ambiguous resolution is a red flag. Read rules every time.
4. Fees and funding
Trading fees, gas, deposit/withdrawal friction and overnight funding (where relevant) all matter. See fees and risk.
5. Identity vs wallet access
KYC venues (Kalshi, PredictIt) trade convenience of fiat rails for identity checks. Wallet venues reduce onboarding friction but add custody and regional uncertainty — see no-KYC list.
FAQ
Why did my “probability” not match the fill?
Mid prices ignore spread and slippage. Always check the book or quote you will actually hit.
What makes a market trustworthy?
Clear rules, credible resolution source, enough liquidity, and transparent fees — the same pillars in Gamma Score.
Where do I compare platforms?
Use Best platforms, Compare, and region pages for USA/UK/EU.