An education pillar on reading a prediction market price as an implied probability: the cents to percent translation, why it is implied rather than true, the spread, fees, longshot bias, and how to use the number without being fooled by it. Information, not advice.
Last reviewed 23 June 2026 · Educational, not advice
A contract that settles to one dollar if an event happens trades between 1 and 99 cents. That price is the market's estimate of the chance. Drag the slider to see the implied probability and what a 100 dollar stake would return if it resolves yes. It is an estimate, not a forecast, and not advice.
Illustrative; excludes fees and spread, which reduce real returns.
On a market where a contract pays one dollar if it resolves yes and zero if it resolves no, the price in cents reads directly as the implied probability in percent. A contract at sixty two cents implies roughly a sixty two percent chance. Divide cents by one hundred to get the probability as a decimal. This is general information, not advice.
No. It is the market current estimate, set by the people trading, not a fact about the world. It reflects their collective view at that moment, including any bias, thin liquidity, or fees, and it can be wrong. Treat it as a well informed opinion to compare against your own, not as the real chance.
Because of the spread and the cost of trading. The price to buy yes plus the price to buy no often sums to a little over one dollar, and that gap is part of how the venue and liquidity providers are compensated. It is one reason the raw price slightly overstates the clean probability.
It is a tendency for very unlikely outcomes to trade a little higher than their true chance and heavy favorites a little lower, partly because some participants overpay for a large potential payout. It means prices near the extremes deserve extra scrutiny, though it does not tell you any single price is wrong.
No. Ninety cents implies about a ninety percent chance, which still means the market expects the outcome to fail roughly one time in ten. A high price is a strong favorite, not a guarantee, and acting as if it were certain is a common and expensive mistake.