YES and NO Shares in Prediction Markets: What They Mean and How to Trade Them

Every binary prediction market comprises precisely two possible outcomes, each represented through YES and NO shares. Grasping their pricing mechanics and settlement procedures represents the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Quoted at the prevailing probability assessment of the market.
• NO share: Delivers $1 should the event fail to materialise. Perpetually quoted at one minus the YES quotation.
• YES price + NO price = $1: Their combined value consistently reaches $1 (with minor variance for bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" When YES trades at $0.40, the market signals a 40% likelihood of inflation breaching that threshold. NO consequently trades near $0.60, reflecting the 60% probability it remains subdued.

How to Read Probability from Price

A YES share's quotation directly mirrors the market's implicit probability:

• YES at $0.90 = 90% likelihood the outcome materialises
• YES at $0.50 = 50% likelihood (equiprobable scenario)
• YES at $0.10 = 10% likelihood (improbable occurrence)
• YES at $0.01 = 1% likelihood (remote but theoretically feasible)

Calculating Your Returns

Maximum settlement per share stands at $1, independent of your acquisition cost:

• Acquire 100 YES shares at $0.30 → outlay $30 → upon YES resolution: collect $100 (gain: $70, yield: 233%)
• Acquire 100 NO shares at $0.70 → outlay $70 → upon NO resolution: collect $100 (gain: $30, yield: 43%)

Contrarian YES positions furnish amplified upside potential alongside diminished success odds. Consensus NO positions deliver modest gains coupled with elevated winning probability.

Selling Before Resolution

Market positions needn't remain open until final determination. Should prices shift favourably, you may liquidate holdings prematurely and crystallise gains:

• Entered YES at $0.30, quotation advances to $0.55 → exit immediately at $0.55/share without awaiting conclusion
• Position deteriorating? Mitigate losses via liquidation at the current quoted price

Multi-Outcome Markets

Markets encompassing three or more possibilities (such as "Which candidate prevails in the 2028 presidential election?") feature distinct YES/NO pairs for each option. You may acquire YES on whichever candidate you favour — successful prediction yields $1 per share held.

FAQ

What happens to shares when a market resolves?

Successful shares instantaneously receive $1 USDC per unit. Unsuccessful shares forfeit all value. Disbursement executes mechanically—no participant intervention necessary.

Can I hold both YES and NO shares in the same market?

Absolutely—termed a protective position. Market participants frequently maintain dual exposure to dampen volatility or secure predetermined returns from pricing inefficiencies.

What is the minimum share purchase?

PolyGram permits acquisition commencing at $1 notional value at prevailing quotations. No floor exists on absolute share quantity.