Resolution is the moment a prediction market is settled. The outcome is decided against the written contract rule, contracts on the correct side pay out their full value, and contracts on the wrong side expire worth nothing.
Last reviewed 20 July 2025 · Educational, not advice
When a market is created it comes with a rule that says exactly what will count as the answer and where that answer will be read from. Resolution is the point at which that rule is applied. The agreed source is checked, the real outcome is decided, and the market closes. A yes contract that matches the real outcome settles at its full value, and a yes contract on the side that did not happen settles at nothing. The same logic runs in reverse for a no contract.
The settlement source matters as much as the question. A clearly written market names the authority it will trust in advance, for example an official result, a government release, or a named data provider, and it states the exact date or condition that triggers resolution. Reading that rule before you trade tells you what you are actually being asked to forecast. Two markets that look similar can resolve differently because they read from different sources or use different cut off times.
On regulated venues in the United States, the Commodity Futures Trading Commission expects an exchange to publish clear contract terms, including how settlement will be determined, who decides, and when, and to prevent disruption to the settlement process. As of July 2025 the federal rules covering these contracts are still developing, so the precise requirements can change over time. The point for a trader stays the same. Settlement is governed by the written rule, not by what feels fair on the day.
Until resolution you are usually free to trade out of your position at the current market price to take a profit or limit a loss. After resolution the result is final and the money is paid or lost according to the rule. Because the outcome can land either way, every contract carries the risk that it settles against you and the full value you committed is lost. Always read the resolution rule and the resolution date before you commit.
A market asks whether a named index will close above a stated level on a given date, reading from the official closing figure. On that date the index closes just below the level. The market resolves no. No contracts pay their full value and yes contracts expire at nothing, regardless of where the price traded earlier in the week. The written source and the cut off time, not the intraday swings, decided the result.
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Resolution decides which contracts pay and which expire worthless, so a position can be a total loss. Until a market settles you can often trade out, but once it resolves the result is final. Stake only what you can afford to lose, never to chase a loss, and never on borrowed money. If it stops feeling like a free choice, step back. In the United States you can call or text the helpline on 1-800-GAMBLER or visit ncpgambling.org.
Resolution is when the market is settled against its written rule. The agreed source is checked, the winning side is paid its full value, and the losing side expires at nothing.
The exchange or its named settlement source decides, following the contract rule published in advance. On regulated United States venues the exchange is responsible for a clear and orderly settlement process.
Usually yes. Until the market settles you can often buy or sell at the current price to lock in a gain or cut a loss. After resolution the result is final.
Contracts on the correct side pay their full value and contracts on the wrong side expire worth nothing, so a position can be a total loss.
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