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

All binary prediction markets consist of precisely two possible outcomes, each represented by YES and NO shares. Grasping their pricing mechanics and settlement procedures forms the cornerstone of effective prediction market trading strategy.

Basic Mechanics

• YES share: Settles at $1 upon event confirmation. Reflects the market's current probability assessment at any given moment.
• NO share: Settles at $1 if the event fails to occur. Valued at the complement of the YES price.
• YES price + NO price = $1: These two always total $1 (with minor variance for bid-ask spreads)

Illustration: "Will inflation surpass 3% in Q3 2026?" Suppose YES trades at $0.40; this signals the market assigns 40% odds to inflation exceeding 3%. NO consequently trades near $0.60, representing the 60% likelihood it remains lower.

How to Read Probability from Price

A YES share's price directly corresponds to the market's probability assessment:

• YES at $0.90 = 90% odds the event materialises
• YES at $0.50 = 50% odds (even odds)
• YES at $0.10 = 10% odds (unlikely scenario)
• YES at $0.01 = 1% odds (improbable yet conceivable)

Calculating Your Returns

Each share's terminal payout caps 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%)

Underdog YES positions deliver outsized upside but carry lower win probability. Favoured NO positions yield modest gains paired with elevated success likelihood.

Selling Before Resolution

Holding through final settlement isn't mandatory. Should market sentiment shift favourably, liquidate your holdings early to realise gains:

• Entered YES at $0.30, price climbs to $0.55 → exit immediately at $0.55/share, capturing profit ahead of closure
• Trade moving adversely? Mitigate damage by exiting at prevailing market rates

Multi-Outcome Markets

Markets encompassing three or more outcomes (such as "Which candidate will claim the presidency in 2028?") feature separate YES/NO pairs for each option. You may purchase YES on your preferred candidate — victory triggers $1 per share payout.

FAQ

What happens to shares when a market resolves?

Successful shares instantly receive $1 USDC per unit. Unsuccessful shares forfeit all value. Payout occurs automatically — manual intervention unnecessary.

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

Absolutely — traders employ this dual-position strategy as a hedge to dampen volatility or capitalise on arbitrage inefficiencies with assured returns.

What is the minimum share purchase?

PolyGram permits fractional share acquisition starting from $1 notional value at prevailing rates. No fixed share count minimum applies.