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Trading Prediction Markets

Prediction markets trade through an order book, the same as any other market on TxFlow.

Choosing a side

Pick the outcome first, then the side.

Buy YES when you think the event is more likely than the price implies. YES at $0.40 implies ~40%; if you think it is closer to 60%, YES is the buy.

Buy NO when you think it is less likely. YES at $0.75 means NO is around $0.25; if you think the true probability is well below 75%, NO is the buy.

Order types

Market order — executes against the best available orders in the book. The fill price can differ from what was displayed when you submitted, especially in a thin market.

Limit order — you set the price you are willing to trade at. It rests until filled, cancelled, or the market stops accepting orders, and it may fill partially. See Orders & Time-in-Force for the shared order semantics.

Reading the book

  • Bid — the highest price buyers will currently pay.
  • Ask — the lowest price sellers will currently accept.
  • Spread — the gap between them.

Thin liquidity and a wide spread both raise the cost of entering and exiting, which matters more here than in a deep perp book.

Position value

Buy 100 YES @ $0.40 → cost $40. If the position can be sold at $0.65:

market value     = 100 × $0.65 = $65
unrealized PnL   = $65 − $40   = +$25

Selling at $0.65 realizes the difference. Actual PnL depends on your fill prices and fees.

PnL at resolution

win:   shares × ($1 − average entry price) − fees
lose:  shares × (0  − average entry price) − fees

Fees

Prediction market trades may carry a trading fee that depends on the market and how the order executed. The applicable fee is shown before you place the order.

Three things that make these fees different from the rest of the platform:

  1. Prediction volume does not count toward volume-based fee tiers.
  2. Prediction fees are not eligible for referral rebates.
  3. Prediction fees cannot be offset with Fee Credits.