Open Polymarket for the first time and the first thing that stops you is the prices. They are quoted in cents, between zero and one hundred. The contract for "Will the Bank of England cut rates in June?" might say 34¢. The one next to it might say 71¢.
If you have never traded a prediction market before, that is genuinely confusing. Cents per what? Per share? What are you actually buying? And why does the headline say "34 per cent chance" right next to a price of 34 cents, is that a coincidence, or is it the same number?
It is the same number. Once you see why, the rest of the platform clicks into place. If you want the higher-level introduction first, our explainer on how prediction markets work covers the foundations. Otherwise, here is the version that takes five minutes.
The one-dollar contract
Every prediction market contract on Polymarket and Kalshi works the same way. You buy a share that pays out one dollar if the event happens, and zero if it does not. Always one dollar. Always.
That is the trick. Because the maximum payout is fixed at a dollar, the price you pay for the share is, by definition, the implied probability of the event.
If the market thinks there is a 60 per cent chance Liverpool wins the Premier League, the share for "Liverpool wins" trades at 60 cents. Pay 60 cents now, get a dollar back if you are right. Your profit if you win is 40 cents. Your loss if you are wrong is the 60 cents you paid.
That is the entire mechanic.
Why prices equal probabilities
Imagine you and a friend disagree about a coin flip. You think it is a fair coin and offer to bet at 50 cents. He thinks it is biased toward heads and is willing to pay 55 cents to bet on heads. The price the two of you settle on is the price at which neither of you can find a better deal, and that price is, in expectation, the probability of heads.
Scale that up to thousands of traders, and the price of a contract is the price at which buyers and sellers stop disagreeing. If new information arrives, a poll moves, a player is injured, a central bank speaks, the price moves until a new equilibrium is found. That equilibrium price is the market's best probability estimate at that moment.
This is why traders treat the price as a probability. It is not a perfect measure, markets can be moved by liquidity, manipulation or bias, but on a deep market it is usually the cleanest single number you will get.
Reading Polymarket
On Polymarket, every market shows the contract price as a percentage by default. Click into a market and you will see a chart showing how the price has moved over time, with two lines for yes and no. The yes line is the market's probability the event happens. The no line is one minus that, less the spread.
The order book underneath the chart shows the prices people are currently willing to buy and sell at. If yes is showing 67¢ to buy and 65¢ to sell, the market is calling it 65 to 67 per cent, the gap of two cents is the spread, which is your friction cost if you trade.
On a liquid market, a major election, a Fed decision, that spread will be a cent or less. On a thin market, it can be five cents or more, and you should treat the headline price with appropriate scepticism. If you want to start trading on Polymarket from a supported jurisdiction, the order book is the first thing to learn to read.
Reading Kalshi
Kalshi shows prices in cents in much the same way, but the platform leans into the dollar-and-cents framing more heavily. A contract priced at 34¢ on Kalshi is identical in mechanics to a Polymarket contract at the same price. The differences come from the asset, Kalshi runs regulated event contracts in the US under the CFTC, with a slightly different settlement and fee structure, but the read-the-price logic is identical. If you want a side-by-side breakdown, our piece on how to compare Polymarket and Kalshi walks through the practical differences.
Kalshi's interface shows the price along with the implied probability and the maximum profit if your contract settles in your favour. The maximum profit is always one dollar minus the price you paid. To trade on Kalshi, you sign up to a CFTC-regulated US exchange, the contract maths is identical, the wrapper is not.
What to actually do with the number
The price is a probability. Treat it like one. If you think the market is mispricing, if you believe the true probability is 75 per cent and the contract is trading at 60, you have a trade. The expected value of buying at 60 when you think the truth is 75 is positive.
That is the entire analytical framework. Everything else, strategy, edge, position sizing, is built on top of it. You are not betting on outcomes the way you bet on a horse race. You are betting on the gap between what the market thinks the probability is and what you think it is. That is a much more interesting game. The same logic underpins prediction market arbitrage, where the gap is between two venues rather than between you and the market.
Common mistakes
Treating the price as binary. A 70¢ contract is not "going to win." It is being priced as a 70 per cent shot. Three times out of ten, in expectation, you will lose. If you cannot stomach that you should not be trading.
Ignoring the spread. On thin markets, the spread can eat any edge you think you have. If you are paying 67¢ to enter and the market is bid at 60¢, you have given up seven cents of value before the event has even started moving.
Forgetting fees. Both Polymarket and Kalshi charge fees that nibble at your edge. Bake them into your expected value calculation or you will be quietly losing money on trades that look like they should win.
The takeaway
Prediction market odds are not a different language. They are the same probability your weather app shows you when it tells you the chance of rain, just expressed in cents and tradable. Once you read prices as probabilities, the platforms stop being intimidating and start being useful. iPredicta surfaces live prediction market data from both venues so you can see the price, and the implied probability, without juggling tabs.
If you can answer the question "is this priced too high or too low," you have everything you need to trade. The rest is practice. The natural follow-up is our companion piece on prediction markets versus polls, which explains why these prices often move ahead of the polling consensus.
Frequently asked questions
How do prediction market odds work?
Each contract pays out one dollar if the outcome happens, so the price you pay is the market's view of the probability. A contract trading at 67 cents means the market thinks there is a 67 per cent chance the event happens.
Are prediction market odds the same as betting odds?
They represent the same underlying idea, implied probability, but the format is different. Sportsbooks usually quote fractional or decimal odds with the bookmaker's margin baked in. Prediction markets quote prices in cents, and because users trade against each other, the spread is typically much tighter.
Why do Polymarket prices not always add up to 100?
They usually do, by design, yes plus no equals one dollar minus the spread. Where prices look off, it is normally because of fee mechanics, low liquidity on one side of the book, or the market having multiple outcomes that compete for the same dollar.
Can prediction market odds be wrong?
Of course. Odds reflect the consensus of traders who have placed money, that consensus can be biased, herd-driven, or simply uninformed. They are usually a strong signal, especially on liquid markets, but they are not infallible.