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 how these shares are valued and what happens when markets settle is essential for anyone looking to trade prediction markets effectively.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Its current price reflects the market's estimated likelihood.
• NO share: Delivers $1 if the event fails to occur. Priced consistently at one minus the YES price.
• YES price + NO price = $1: These two always total $1 (with minor variance for bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Suppose YES trades at $0.40—this means the market assigns a 40% likelihood to inflation exceeding 3%. Correspondingly, NO settles around $0.60, representing the 60% probability 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% chance the outcome materialises
• YES at $0.50 = 50% chance (even odds)
• YES at $0.10 = 10% chance (unlikely scenario)
• YES at $0.01 = 1% chance (improbable though theoretically possible)

Calculating Your Returns

The ceiling for any payout is $1 per share, independent of your purchase price:

• 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%)

Speculative YES positions targeting underdogs deliver outsized upside but face steeper odds. Backing favourites through NO shares yields modest gains paired with stronger win probability.

Selling Before Resolution

Markets need not be held to completion. Should conditions shift favourably, you may exit positions early and realise gains immediately:

• Entered YES at $0.30, price climbs to $0.55 → liquidate for $0.55/share gain without awaiting final settlement
• Trade moving against expectations? Exit at prevailing market rates to minimise damage

Multi-Outcome Markets

Markets featuring three or more distinct outcomes (such as "Which party will control the presidency in 2028?") assign separate YES/NO pairs to each option. You may back any single option via its YES shares—should that option prevail, your YES holdings convert to $1 each.

FAQ

What happens to shares when a market resolves?

Successful shares are credited $1 USDC automatically. Unsuccessful shares forfeit all value. The process executes without manual intervention.

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

Absolutely—such dual positions serve as hedges. Many traders employ this tactic to dampen volatility or capitalise on pricing anomalies that guarantee returns.

What is the minimum share purchase?

On PolyGram, purchases begin at $1 worth of shares at the prevailing price. No floor exists on the quantity of shares acquired.