Prediction Market Returns Calculator: How Much Can You Make on Each Trade?

Every prediction market trade hinges on a straightforward expected value calculation. Mastering this framework ensures you approach each position with full clarity — you understand precisely what success rate you require, at what odds, and which probability threshold separates profit from loss.

Basic Return Calculation

For a YES share acquired at price P:

• Win return: (1 - P) / P × 100% = your percentage profit if YES wins
• Loss: 100% of your stake if NO wins
• Break-even probability: P (the market price IS the break-even probability)

Examples:

• YES at $0.20: win = +400%, break-even = 20%
• YES at $0.50: win = +100%, break-even = 50%
• YES at $0.75: win = +33%, break-even = 75%
• YES at $0.90: win = +11%, break-even = 90%

Expected Value Formula

EV = (Your probability × Win amount) - ((1 - Your probability) × Stake)

For a $100 position on YES at $0.40, assuming your assessed probability stands at 55%:

• Win amount if YES: $150 (receive $250, paid $100)
• Loss if NO: -$100
• EV = (0.55 × $150) - (0.45 × $100) = $82.50 - $45 = +$37.50 expected value

How to Use This in Practice

1. Establish your probability estimate BEFORE entering any trade
2. Determine the break-even probability (equals market price)
3. If your estimate exceeds break-even by more than the spread: compelling opportunity
4. If your estimate falls below break-even: evaluate NO shares as an alternative
5. If your estimate aligns with break-even: pass — insufficient advantage

Position Size Calculator

Using half-Kelly: f = 0.5 × (bp - q) / b

• For a trade where your p = 0.65, market = 0.40: b = 1.5, q = 0.35
• Full Kelly: (1.5 × 0.65 - 0.35) / 1.5 = 0.42 (42% of bankroll)
• Half Kelly: 21% of bankroll — still cap at 5% per position rule

FAQ

Is there an automated calculator for prediction market trades?

PolyGram displays projected fill price, shares received, and prospective payout within the trade interface prior to execution. Independent EV analysis remains invaluable for evaluating opportunities before committing capital.

How do spreads affect the return calculation?

Adjust your effective purchase price upward by half the spread width. When YES carries a bid=0.38, ask=0.42 quotation, your realistic entry point is approximately 0.42 rather than 0.40.