A prediction market is a marketplace where traders buy and sell shares tied to the outcome of a future event, with prices reflecting the crowd's estimated probability.
Understanding prediction market helps you read prices and manage risk on any prediction market platform.
Example
A market asking "Will it rain tomorrow?" might show YES trading at 40¢, implying the crowd sees a 40% chance of rain.
Why it matters
Knowing how prediction market works lets you compare markets and avoid costly mistakes when trading.
Practical tip
Before trading, check how prediction market 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 prediction market in action before risking real funds.