Prediction Market Glossary

Plain-English definitions of the terms used on Polymarket and Kalshi: contracts, resolution, liquidity, calibration, arbitrage, scalar markets and more.

Last updated 16 October 2026

Prediction markets borrow vocabulary from both trading floors and betting shops, which makes the jargon unusually confusing for newcomers. These are the terms you will actually meet on Polymarket and Kalshi, in plain English.

The basics

Contract (or share)

The thing you buy. A contract pays $1 if its outcome happens and $0 if it doesn't. Everything else follows from that.

YES / NO

The two sides of a binary market. Their prices always sum to $1 — if YES costs 63¢, NO costs 37¢. Buying NO is the same bet as selling YES.

Implied probability

The contract price read as a percentage. 63¢ means the market puts the chance at about 63%. See how prediction market odds work for the conversions to decimal, fractional and American odds.

Resolution

The moment the outcome is decided and contracts pay out. Each market names a resolution source — the authority whose word settles it, such as an official results page or a named data provider.

Resolution rules

The written criteria for what counts as YES. These matter far more than they look: ambiguous real-world events are settled by the letter of these rules, not by what feels obviously true. Read them before trading anything unusual.

Prices and trading

Order book

The live list of buy and sell offers at each price. A deep order book means you can trade size without moving the price; a thin one means you can't.

Bid, ask and spread

The bid is the best price someone will buy at, the ask is the best price someone will sell at, and the spread is the gap between them. The spread is a real cost of trading: on quiet markets it can be several cents wide.

Maker and taker

A maker posts an order that waits in the book, adding liquidity. A taker accepts an existing order, removing it. Platforms often charge the two differently.

Liquidity

How much money is available to trade against. Low liquidity means a single order can swing the price, so the implied probability of a thin market is a weak signal. Always check volume before reading meaning into a price.

Volume

The total value traded in a market. High volume means many participants have put money behind the current price, which makes it more trustworthy — though volume alone doesn't make a market worth following.

Slippage

The difference between the price you expected and the price you got, because your order ate through several levels of the book. Worst on thin markets and large orders.

Reading the market

Calibration

Whether stated probabilities match real-world frequencies. A well-calibrated market is one where things priced at 70% happen about 70% of the time. It is the main measure of whether a prediction market is any good.

Favourite-longshot bias

The long-documented tendency for very unlikely outcomes to be overpriced and near-certain ones underpriced — people overpay for lottery-ticket payoffs. It shows up in prediction markets as well as in betting markets.

Overround (vig)

A bookmaker's built-in margin, which makes the implied probabilities of a sportsbook market sum to more than 100%. Prediction markets don't have one: YES and NO sum to $1 by construction, and the platform charges fees instead.

Arbitrage

Buying the same outcome cheaply on one platform while selling it dearer on another, locking in the difference. Cross-platform gaps appear regularly because Polymarket and Kalshi have different user bases — though fees, transfer times and resolution-rule differences can eat the gap.

Longshot

A contract trading in the low single digits of cents. Huge payoff multiples, and usually priced that way for good reason.

Market structure

Binary market

A market with exactly two outcomes: it happens or it doesn't. Most markets are binary.

Categorical / multi-outcome market

A market with several mutually exclusive outcomes — "who wins the election" with one contract per candidate. The prices across all outcomes should sum to roughly $1.

Scalar (range) market

A market on a number landing inside a band, like "Bitcoin between $60k and $65k". Providers generate these in bulk, which is why you'll see long ladders of near-identical contracts.

Series and events

Platform groupings. An event is one real-world happening; a series is a repeating family of events, such as a weekly economic release. Kalshi tickers encode both, which is why its market URLs look like code.

Settlement

The payout after resolution: winning contracts become $1, losing ones become $0, and the money lands in your account balance.

Money

Collateral

The cash backing your position. Prediction market contracts are fully collateralised — the maximum you can lose is what you paid, and there is no margin call or negative balance.

USDC

The dollar-pegged stablecoin Polymarket settles in, held on the Polygon network. Kalshi, being a US-regulated exchange, uses ordinary dollars.

Self-custody wallet

A crypto wallet you control the keys to. On-chain platforms require one; losing the keys means losing the funds, with no support line to call.

See the terms in action

Every market page on this site shows the live price, the implied probability, the volume and the resolution date side by side across providers.

World

Polymarket