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

All binary prediction markets split into two mutually exclusive outcomes, each represented by YES and NO shares. Grasping the pricing mechanics and settlement procedures represents the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Settles to $1 upon event occurrence. Its current market value reflects the consensus probability.
• NO share: Settles to $1 if the event fails to occur. Its price always equals one minus the YES valuation.
• YES price + NO price = $1: Both instruments combine to equal $1 in total value (with minor variance for trading spreads)

Consider this scenario: "Will inflation breach 3% during Q3 2026?" Suppose YES trades at $0.40, signalling the market assigns a 40% likelihood to inflation surpassing the 3% threshold. NO consequently trades near $0.60, representing the 60% chance inflation remains subdued.

How to Read Probability from Price

A YES share's market quotation directly corresponds to the collective 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

Each share yields a maximum settlement value of $1, irrespective of acquisition cost:

• 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%)

Underdog YES positions deliver outsized profit potential but face steeper odds. Favoured NO positions generate modest gains paired with elevated win probability.

Selling Before Resolution

Holding through settlement isn't mandatory. Should the market shift favourably, you may liquidate your position early and capture gains without awaiting final determination:

• Purchased YES at $0.30, market rallies to $0.55 → exit position at $0.55/share, realising profit ahead of resolution
• Trade deteriorating? Reduce exposure by selling at prevailing market rates

Multi-Outcome Markets

Markets encompassing three or more possible results (such as "Which party will control the presidency in 2028?") feature distinct YES/NO pairs for each option. You may purchase YES contracts on any candidate — victory for your selection triggers $1 settlement per share held.

FAQ

What happens to shares when a market resolves?

Successful shares automatically convert to $1 USDC per unit. Unsuccessful shares forfeit all value. The settlement process executes automatically without participant intervention.

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

Absolutely — this arrangement constitutes a hedge strategy. Participants sometimes maintain dual positions to dampen volatility or capitalise on arbitrage inefficiencies by locking in guaranteed returns.

What is the minimum share purchase?

PolyGram permits purchases starting from $1 in notional value at prevailing rates. No floor exists on the absolute quantity of shares acquired.