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

Every binary prediction market contains precisely two possible outcomes, each represented through YES and NO shares. Grasping their pricing mechanics and settlement procedures forms the cornerstone of effective trading within these markets.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Reflects the market's current probability assessment in its price.
• NO share: Delivers $1 should the event fail to occur. Its price consistently equals one minus the YES share price.
• YES price + NO price = $1: These two always combine to equal $1 (with minor variance for spreads)

Consider this scenario: "Will inflation breach 3% during Q3 2026?" Suppose YES trades at $0.40—this signals the market assigns a 40% likelihood to inflation surpassing 3%. Correspondingly, NO trades around $0.60, representing the 60% chance it remains lower.

How to Read Probability from Price

A YES share's price directly corresponds to the market's assessed probability:

• YES at $0.90 = 90% likelihood the outcome materialises
• YES at $0.50 = 50% likelihood (even odds)
• YES at $0.10 = 10% likelihood (improbable scenario)
• YES at $0.01 = 1% likelihood (remote but conceivable)

Calculating Your Returns

Each share delivers a maximum payout of $1 upon settlement, independent 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 yield substantially larger returns but carry diminished winning odds. Favoured NO positions generate modest returns paired with elevated success probability.

Selling Before Resolution

Market closure isn't mandatory—exit early when conditions favour you and capture gains immediately:

• Purchased YES at $0.30, market advances to $0.55 → offload at $0.55/share, realising profit without awaiting final settlement
• Facing unfavourable movement? Liquidate at prevailing market rates to minimise exposure

Multi-Outcome Markets

Markets encompassing multiple possibilities (such as "Which candidate prevails in the 2028 presidential election?") feature distinct YES/NO pairs for each option. You may purchase YES on any contender—your shares convert to $1 each should your selection succeed.

FAQ

What happens to shares when a market resolves?

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

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

Absolutely—termed a hedge position. Traders frequently maintain both to minimise volatility exposure or capitalise on arbitrage scenarios with assured returns.

What is the minimum share purchase?

PolyGram permits acquisitions commencing at $1 in market value at prevailing rates. No floor exists on individual share quantity.