Trading Prediction Markets

Prediction markets on TxFlow can be traded through an order book.

Choosing a Side

Before placing an order, select the outcome you want to trade.

For a binary market:

Buy YES

Buy YES when you believe the probability of the event is higher than the current market price implies.

Example: YES Price = $0.40

If you believe the true probability is closer to 60%, you may choose to buy YES.

Buy NO

Buy NO when you believe the event is less likely to happen than the current market price implies.

Example:

YES Price = $0.75

NO Price ≈ $0.25

If you believe the event has a much lower probability than 75%, you may choose to buy NO.

Order Types

Market Order

A Market Order executes against the best available orders in the order book.

The final execution price may differ from the price displayed when you submit the order, particularly when market liquidity is limited.

Limit Order

A Limit Order allows you to specify the price at which you are willing to trade.

The order may remain open until:

• It is filled

• It is cancelled

• The market stops accepting orders

A Limit Order may also be partially filled.

Understanding the Order Book

The order book displays available buy and sell orders at different prices.

Common information includes:

Bid

The highest price buyers are currently willing to pay.

Ask

The lowest price sellers are currently willing to accept.

Spread

The difference between the best bid and best ask.

Lower liquidity or a wider spread can increase the cost of entering or exiting a position.

Position Value

The value of a prediction market position changes as the market price changes.

Example:

You buy: 100 YES @ $0.40

Initial cost: 100 × $0.40 = $40

Assume the position can currently be sold at $0.65.

Estimated market value: 100 × $0.65 = $65

Estimated unrealized PnL: $65 - $40 = +$25

If you sell at $0.65, the price difference becomes realized PnL.

Actual PnL depends on execution prices and applicable fees.

PnL at Resolution

If your position wins:

PnL = Number of Shares × ($1 - Average Entry Price) - Fees

If your position loses:

PnL = Number of Shares × (0 - Average Entry Price) - Fees

Winning shares settle at $1 per share, while losing shares settle at $0.

Trading Fee

Prediction Market trades may be subject to trading fees depending on the market and how your order is executed. The applicable fee is displayed before you place an order.

For detailed fee rates and calculation methods, refer to the Probly Fee Schedule.

Please note that:

1. the trading volume generated by prediction markets will not be counted towards Volume-based fee tier calculations.

2. Trading fees generated by prediction markets are not eligible for fee rebates.

3. Trading fees generated by prediction markets cannot be offset using fee credits.