YES and NO Shares in Prediction Markets: What They Mean and How to Trade Them

Every binary prediction market contains precisely two competing outcomes, each represented by YES and NO shares. Grasping how these instruments are valued and what settlement looks like represents the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Valued according to the market's current probability assessment.
• NO share: Delivers $1 if the event fails to occur. Priced consistently at 1 minus the YES valuation.
• YES price + NO price = $1: Combined, they invariably total $1 (with minor variations for bid-ask spread)

Illustration: "Will inflation surpass 3% during Q3 2026?" Should YES trade at $0.40, the market signals a 40% likelihood of inflation exceeding 3%. NO consequently trades near $0.60 (reflecting 60% odds of remaining below that threshold).

How to Read Probability from Price

A YES share's price directly reflects what the market believes is the probability:

• YES at $0.90 = 90% likelihood the event materialises
• YES at $0.50 = 50% likelihood (even odds)
• YES at $0.10 = 10% likelihood (unlikely scenario)
• YES at $0.01 = 1% likelihood (improbable yet theoretically possible)

Calculating Your Returns

Each share yields a maximum settlement value of $1, irrespective of your entry 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%)

Contrarian YES bets present elevated return potential paired with diminished winning odds. Consensus NO positions yield modest gains alongside stronger probability of success.

Selling Before Resolution

Retention until final settlement is optional. Should market conditions favour your position, exit early and realise gains:

• Entered YES at $0.30, price climbs to $0.55 → liquidate immediately at $0.55/share without awaiting final outcome
• Trade deteriorating? Mitigate damage by exiting at prevailing market rates

Multi-Outcome Markets

Markets encompassing three or more possibilities (such as "Which party will control the presidency in 2028?") feature separate YES/NO pairs for each option. Purchase YES on your preferred outcome — should that option prevail, each YES share settles at $1.

FAQ

What happens to shares when a market resolves?

Successful shares receive automatic $1 USDC payment per unit. Unsuccessful shares forfeit all value. Payout occurs instantly — participant involvement is unnecessary.

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

Absolutely — termed a hedge strategy. Market participants frequently maintain dual positions to dampen volatility or secure fixed returns through arbitrage scenarios.

What is the minimum share purchase?

PolyGram permits share acquisition beginning at $1 notional value at prevailing rates. No floor exists on the quantity of shares purchased.