Every prediction market is built from a matched pair. One contract pays if the event happens, the other pays if it does not, and their prices add up to about a dollar. Understand the pair and you understand the whole instrument.
A yes contract pays one dollar if a defined event happens and nothing if it does not. A no contract on the same question is its mirror, paying one dollar if the event does not happen and nothing if it does. Because exactly one side will be worth a dollar at settlement and the other worth zero, their two prices add up to about one hundred cents before fees, and each price reads as the market implied probability of that side. Buying no is a direct way to back the event against happening, with your loss capped at what you paid, rather than selling a yes you do not own. The price is an implied probability, not a forecast, and we never name a side to take.
Every market gives you a yes and a no on the same defined event. They are not two separate bets, they are the two sides of a single question, and only one of them can finish in the money.
At resolution the winning side is worth one dollar per contract and the losing side is worth zero. There is no partial credit, so a near miss pays the same as a wide miss, which is nothing.
Since one side always pays a dollar, owning both is worth about a dollar, so the yes price plus the no price lands near one hundred cents. Any gap reflects fees, the spread, or thin trading.
A yes price of sixty cents reads as a sixty percent implied probability. It describes what the market currently thinks, not what will happen, and it can be confidently wrong and move sharply.
Figure 1. The two prices of a single market fill one dollar between them. The yes width is its implied probability, the no width is the rest. Illustrative example, prepared by Prediction Market Index, June 2026. Real markets show small gaps for fees and the spread.
A yes contract is a claim that a specific, defined event will happen by a stated date. If the event occurs as the market wording describes, the contract settles at one dollar. If it does not, the contract settles at zero. On Kalshi, for example, event contracts are binary and settle to one dollar for yes or zero for no, per Kalshi's published contract materials and fee schedule effective February 2026. That fixed payout is the foundation of everything else on this page, because it is what lets a price double as a probability.
Because the maximum value of a yes contract is one dollar, its price will always sit somewhere between just above zero and just below a dollar while the market is live. On most venues that range is one cent to ninety nine cents. A price of seventy cents means the contract costs seventy cents now and will be worth a dollar if yes wins, so you are risking seventy cents to make thirty. The closer the price sits to a dollar, the more the market already expects yes, and the less there is left to gain.
A no contract is the exact mirror of the yes contract on the same question. It pays one dollar if the event does not happen and zero if it does. Buying no is the direct, built in way to take the view that an event will not occur. You are not borrowing anything and you are not selling something you do not own. You are buying a contract whose payout is tied to the event failing, and your maximum loss is simply the price you paid for it.
This is why beginners are often told to think in terms of yes and no rather than buying and selling. If you believe an event is unlikely, you do not need to find someone to sell to or learn how to short. You buy the no contract, the price of which reflects the market implied probability that the event will not happen. If the no price is thirty five cents, the market is implying a thirty five percent chance the event does not occur, and you would pay thirty five cents for a contract worth a dollar if you are right.
The reason the yes price and the no price add up to roughly one hundred cents is simple once you see it. At settlement, one of the two contracts will be worth a dollar and the other will be worth nothing. So if you owned one yes and one no on the same market, you would be guaranteed to hold exactly one dollar at the end, no matter which way the event went. A thing that is guaranteed to be worth a dollar should cost about a dollar today, which means the two prices that make it up should sum to about a dollar too.
In practice the sum is close to a dollar rather than exactly a dollar, and the small gap is informative rather than mysterious. Fees, the spread between the best buy and sell prices, and thin trading can all push the pair slightly above or below one hundred cents at any given moment. A persistent, large gap is unusual on a liquid market because it would invite traders to step in, but a small wobble is normal. When you see the two sides quoted, adding them in your head is a quick sanity check that you are reading the market correctly.
It is tempting to call buying no the same as shorting the event, and the intuition is close, but the mechanics differ in a way worth understanding. When you buy a no contract you take a long position in the outcome not happening, and your loss is capped at the price you paid. You cannot lose more than your stake, because the worst case is that yes wins and your no contract settles at zero. That capped downside is a meaningful difference from many forms of short selling, where losses can exceed the original stake.
Selling a yes contract you already hold is a different action again. That is closing or reversing a position you own, not opening a fresh view that the event will not happen. How each platform lets you express these positions varies, and some venues frame everything as buying yes or buying no while others expose explicit sell orders. The practical takeaway is to read the order types a venue offers and confirm what a given button actually does before you use it, rather than assuming it matches a term you know from stock trading.
When the market resolves, it is decided against its defined wording and its named settlement source. The winning side pays one dollar per contract and the losing side pays nothing. There is no partial payout and no credit for being close. A result that felt like a near miss still settles at zero if it did not meet the stated threshold, which is why reading the exact market wording before you trade matters as much as having a view on the event. Two markets that sound similar in plain language can resolve differently because their wording or their source differs.
This binary nature is the whole point of the instrument, and it is also its sharpest edge. It makes the price clean to read as a probability, because a contract worth a dollar with probability p is worth about p dollars today. It also means there is no soft landing. You should size positions with the knowledge that the losing side goes to zero, not to some fraction of what you paid. Understanding settlement in advance, including how disputes are handled, is part of trading these contracts responsibly.
Figure 2. The payout of one yes contract bought at forty cents. If yes resolves you receive one dollar, a sixty cent profit. If no resolves you receive nothing and lose the forty cents paid. Illustrative example, prepared by Prediction Market Index, June 2026.
Because a yes contract pays a fixed one dollar, its price carries a natural reading. A yes price of sixty cents corresponds to a sixty percent implied probability that the event happens, and the matching no price of about forty cents corresponds to the forty percent chance it does not. This is one of the most useful features of the format, and it is why people describe these markets as probability machines. The number on the screen translates straight into how likely the crowd currently thinks the event is.
It is just as important to hold that reading loosely. An implied probability is a snapshot of current trading, not a promise about the future, and markets can be confidently wrong. A price of eighty cents does not mean yes will happen, it means the market is pricing a high chance that it will, and prices like that still resolve the other way often enough to matter. We never name a side to take or a predicted outcome on this site. The honest use of the price is as a well calibrated estimate to weigh, not a result to trust.
Fees are the most common reason the two prices do not add up to a clean hundred cents in your actual results. Different venues charge differently, and the structure matters. Kalshi, for instance, charges a trading fee using a parabolic formula, where the taker fee is calculated as the ceiling of 0.07 multiplied by the number of contracts, the price, and one minus the price, with the maker fee using a smaller 0.0175 factor, per Kalshi's fee schedule effective February 2026. That formula makes the fee largest near a price of fifty cents and smallest near one cent or ninety nine cents, and Kalshi states it does not charge a separate settlement fee. By contrast, Polymarket has not charged a per trade trading fee on its core markets, per Polymarket reporting as of June 2026, though onchain network costs and the spread still apply.
The lesson is not to memorise any one schedule, which can change, but to check the current fee terms for the venue you use and to factor them into the pair. A yes and no that quote at ninety nine cents combined are not free money, because fees and the spread usually account for the missing cent or eat into it. When you read a market, treat the quoted prices as the starting point and the fee schedule as the adjustment that tells you what a trade actually costs and returns.
| Yes price | Implied chance of yes | No price | Cost of 100 yes | Payout if yes | Profit if yes |
|---|---|---|---|---|---|
| 20c | about 20 percent | about 80c | $20 | $100 | $80 |
| 40c | about 40 percent | about 60c | $40 | $100 | $60 |
| 60c | about 60 percent | about 40c | $60 | $100 | $40 |
| 85c | about 85 percent | about 15c | $85 | $100 | $15 |
Table 1. A worked example of buying one hundred yes contracts at four different prices, before fees. The payout if yes is fixed at one dollar per contract, so a lower entry price means a larger profit but a lower implied chance of winning. Method: arithmetic on a one dollar binary payout, with fees excluded for clarity. Real returns are reduced by the venue's fee schedule, for example the Kalshi parabolic trading fee effective February 2026. If no wins, each row loses the full cost shown.
Read the middle row of the table as a single trade. You buy one hundred yes contracts at forty cents each, so you pay forty dollars, before fees. If the event happens, each contract settles at one dollar, you receive one hundred dollars, and your profit is sixty dollars on the forty you risked. If the event does not happen, each contract settles at zero, you receive nothing, and you lose the full forty dollars. The matching no contract on the same market would have cost about sixty cents, and a buyer of no would have the opposite result, a forty dollar profit if no wins and a sixty dollar loss if yes wins.
Notice what the entry price does. At forty cents you risk forty to make sixty, which is attractive only if you believe the true chance of yes is meaningfully above forty percent. At eighty five cents you risk eighty five to make fifteen, which only makes sense if you think yes is even more likely than the high price already implies. The price is not just a cost, it is the market telling you how much room is left, and a good decision weighs your own estimate of the probability against the one the price is quoting.
A few misunderstandings come up again and again. The first is thinking a high yes price means yes is certain. It does not, it means the market is pricing a high probability, and high probability events fail regularly. The second is expecting a partial payout for a near miss. There is none, the losing side settles at zero. The third is assuming buying no is exotic or risky in the way shorting a stock can be. On most venues it is a plain long position with your loss capped at the price you paid, and for many traders it is the simpler way to express a view that an event will not happen.
The last common confusion is treating the two quoted prices as the full cost. They are the starting point, and fees plus the spread are the adjustment. A combined quote of ninety nine cents is not a guaranteed cent of profit, because the costs of trading usually close that gap. Reading the market well means holding all of this at once, the fixed dollar payout, the price as a probability, the capped loss, and the fee that sits on top, and none of it requires more than careful arithmetic.
This is a concept guide, so we did not place a trade to write it. In June 2026 we read Kalshi's published contract and fee materials, which describe binary contracts settling at one dollar for yes or zero for no and set out the parabolic trading fee effective February 2026, and we read current reporting on Polymarket's fee position. The numbers in the worked example are deliberately round and illustrative rather than taken from a live market, because individual markets expire and we do not build pages around them. Verify the current fee schedule and contract terms on any venue before you rely on them.
A binary contract settles at a dollar or at zero, so the losing side loses everything staked on it. Treat the price as an estimate to weigh, not a result to trust, stake only what you can afford to lose, and never trade 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.
A yes contract is a claim that a defined event will happen. It pays one dollar if the event occurs by the resolution date and nothing if it does not. Its price between one and ninety nine cents is the market implied probability of the event happening.
A no contract is the mirror of the yes contract on the same question. It pays one dollar if the event does not happen and nothing if it does. Buying no is a direct way to back the outcome against happening, rather than selling a yes you do not hold.
Because exactly one side will settle at a dollar and the other at zero, so owning both together is worth about a dollar before fees. Their prices therefore sum to roughly one hundred cents. Any gap usually reflects fees, the spread, or thin trading rather than free money.
Not exactly. On many venues you buy a no contract directly, which is a long position in the outcome not happening, with your loss capped at what you paid. Selling a yes you hold is different. How each platform handles this varies, so check the available order types.
The market is decided against its defined wording and named source. The winning side pays one dollar per contract and the losing side pays nothing. There is no partial payout, so a result that felt close still pays zero if it did not meet the stated threshold.
No. The yes price is an implied probability that reflects current trading, not a forecast you should treat as certain. Prices can be confidently wrong and can move sharply, and we never name a side to take or a predicted outcome.
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