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

Every binary prediction market comprises precisely two possible outcomes, each represented by YES and NO shares. Grasping their pricing mechanics and settlement procedures 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 should the event fail to occur. Priced consistently at one minus the YES valuation.
• YES price + NO price = $1: These valuations invariably total $1 (with minor variance for bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Should YES trade at $0.40, the market signals a 40% likelihood of inflation exceeding 3%. Correspondingly, NO trades around $0.60 (reflecting 60% odds of remaining beneath that threshold).

How to Read Probability from Price

A YES share's valuation directly reflects the market's probability assessment:

• YES at $0.90 = 90% likelihood the outcome materialises
• YES at $0.50 = 50% likelihood (even odds)
• YES at $0.10 = 10% likelihood (remote possibility)
• YES at $0.01 = 1% likelihood (improbable yet theoretically feasible)

Calculating Your Returns

The ceiling on your settlement value stands at $1 per share, irrespective of acquisition cost:

• Purchase 100 YES shares at $0.30 → outlay $30 → upon YES resolution: collect $100 (gain: $70, yield: 233%)
• Purchase 100 NO shares at $0.70 → outlay $70 → upon NO resolution: collect $100 (gain: $30, yield: 43%)

Speculative YES positions deliver outsized upside but face lower success odds. Defensive NO positions yield modest gains paired with elevated winning probability.

Selling Before Resolution

Holding through market conclusion remains optional. Should market dynamics favour your position, you may liquidate shares prematurely and realise profits:

• Acquired YES at $0.30, market advances to $0.55 → exit immediately at $0.55/share, capturing gains without awaiting final settlement
• Position deteriorating? Mitigate losses by exiting at prevailing market rates

Multi-Outcome Markets

Markets presenting three or more potential outcomes (such as "Which candidate will secure the presidency in 2028?") feature distinct YES/NO pairs for each option. You may purchase YES on any option — should your selection prevail, each YES share settles at $1.

FAQ

What happens to shares when a market resolves?

Successful shares automatically receive $1 USDC per unit. Unsuccessful shares forfeit all value. The settlement process executes automatically — participant intervention is unnecessary.

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

Absolutely — this arrangement constitutes a hedge strategy. Participants frequently employ dual positions to minimise volatility exposure or capitalise on arbitrage inefficiencies.

What is the minimum share purchase?

Through PolyGram, you may acquire share quantities valued from $1 onwards at prevailing market rates. No floor exists on the quantity of shares purchased.