Expected value is the average outcome of a bet if repeated many times, calculated by weighting each possible payoff by its probability.
Understanding expected value helps you read prices and manage risk on any prediction market platform.
Example
A YES share at 40¢ with a true 50% chance has an expected value of (0.50 × $1.00) − $0.40 = 10¢ per share.
Why it matters
Knowing how expected value works lets you compare markets and avoid costly mistakes when trading.
Practical tip
Before trading, check how expected value shows up on the specific platform you use, since interfaces and terminology can vary slightly between exchanges. Reviewing a few live markets is a quick way to see expected value in action before risking real funds.