Prediction Markets Glossary: Terms, Phrases, and Slang A-Z

Writer: Patrik Lidin Principal Writer and Editor / Head of Content

Experience: Sports Trader, Market Maker, Product Owner Sportsbook, Professional Gambler, Poker Player

Published: October 16, 2025, 7:58 AM Updated: 3 weeks ago

Reviewed by:   Expert review board

A

Arbitrage (Arbing)

(See also Hedging)

• Type: Trading
• Definition: Arbitrage in prediction markets involves exploiting price discrepancies between identical or similar prediction market contracts on different platforms or across related markets to earn a risk-free profit by buying low and selling high simultaneously.
• Usefulness: Arbitrage opportunities can provide low-risk gains in prediction market platforms like Kalshi, PredictIt, and Polymarket, but they require quick execution and monitoring multiple platforms to capitalize before prices align.
• Example: "I spotted an arbitrage play when the 'Yes' event contract for Trump winning on Polymarket was at 56¢ but 63¢ on Kalshi; I bought low on Polymarket and sold high on Kalshi for a 7¢ profit per share."

B

Broker

• Type: General
• Definition: A broker is an intermediary or platform that facilitates the buying and selling of prediction market contracts, often providing tools for order placement and account management.
• Usefulness: Brokers like Interactive Brokers integrate prediction markets into traditional trading accounts, making it easier for users to access event contracts without the need for separate crypto wallets.
• Example: "I use Interactive Brokers so that I can trade sports event outcomes easily."

C

Chance (%Chance) 

(See also Forecast and Projected)

• Type: Trading
• Definition: Chance, often displayed as %Chance, refers to the market-implied probability of an event occurring, derived from the current price of a 'Yes' prediction market contract (e.g., a 60¢ price indicates a 60% chance).
• Usefulness: %Chance helps traders quickly gauge collective sentiment and identify undervalued or overvalued prediction market contracts for speculation or hedging.
• Example: "The %Chance on Kalshi for Fed rate cuts this quarter jumped to 75% after the inflation report, signaling stronger market expectations."

Contract

(See also Event Contract)

• Type: Trading
• Definition: A market prediction contract is a tradable instrument in prediction markets that pays out based on the occurrence (or non-occurrence) of a specified future event, typically structured as binary options with $1 payout for correct outcomes.
• Usefulness: Contracts are the core asset in prediction markets, allowing users to express their views on events, from elections to weather, without owning the underlying assets.
• Example: "I bought a sports prediction market contract on Polymarket for the Super Bowl winner; it cost me 40¢ and paid $1 when my pick won."

Crypto

• Type: Payments
• Definition: Crypto refers to the use of cryptocurrencies, such as USDC or other stablecoins, as the primary currency for funding accounts, buying prediction market contracts, and settling payouts on blockchain-based prediction platforms.
• Usefulness: Crypto enables fast transactions on platforms like Polymarket, but it introduces volatility risks unless stablecoins are used.
• Example: "I deposited USDC via crypto on Polymarket to take a position in the geopolitics prediction market without needing a lengthy bank transfer."

Culture

• Type: Markets
• Definition: Culture markets encompass events related to entertainment, media, and social trends, including celebrity outcomes, award shows, and viral pop culture phenomena.
• Usefulness: These markets add fun and diversity to prediction trading, appealing to casual users while providing insights into public sentiment on non-financial events.
• Example: "The culture market on Kalshi for 'Will Taylor Swift release a new album in 2025?' is trading at 82% Yes, reflecting fan and media hype."

E

Earnings

• Type: Markets
• Definition: Earnings markets allow trading on corporate financial results, such as whether a company's quarterly revenue or stock price will exceed analyst expectations.
• Usefulness: Traders can hedge stock positions or speculate on company performance; platforms like Polymarket partner with Stocktwits for real-time earnings sentiment.
• Example: "I shorted the 'Yes' on Apple beating earnings estimates via an earnings prediction market on Polymarket, profiting when the stock dipped post-report."

Event Contract

(See also Contract)

• Type: Trading
• Definition: An event contract is a specific type of binary futures prediction contract that settles based on the yes/no outcome of a real-world event, priced between $0.01 and $0.99 to reflect probability.
• Usefulness: Event contracts are the building blocks of prediction markets, providing a straightforward way to trade probabilities on various topics, including politics and sports.
• Example: "The event contract on Kalshi for 'Will CPI exceed 3% this month?' resolved to Yes, paying out $1 to my long position."

F

Forecast

(See also Chance and Projected)

• Type: Trading
• Definition: A forecast is the collective market prediction of an event's likelihood, expressed through contract prices, serving as a crowd-sourced estimate of probability.
• Usefulness: Forecasts from platforms like Polymarket often outperform polls in terms of accuracy, helping users inform decisions related to betting, hedging, or business planning.
• Example: "Polymarket's forecast gave Harris a 48% chance right before the election, closer to the wire than any traditional poll."

G

Geopolitics

• Type: Markets
• Definition: Geopolitical markets focus on international relations and global events, including conflicts, foreign elections, and diplomatic outcomes.
• Usefulness: These markets provide a way to gauge and trade on global risks, which is helpful for investors hedging against currency or commodity fluctuations.
• Example: "The geopolitics market on Polymarket for 'China invading Taiwan by 2025' is at just 6% Yes, easing some global trade worries."

H

Hedging

(See also Arbitrage)

• Type: Trading
• Definition: Hedging involves taking an offsetting position in a prediction market contract to reduce risk from an existing exposure, such as buying 'No' on an adverse event.
• Usefulness: Hedging protects portfolios from uncertainties, such as policy changes; it's a key strategy for institutions using prediction markets alongside traditional assets.
• Example: "A farmer hedged crop risks by buying 'Yes' contracts on Kalshi for 'Drought in Midwest this summer,' offsetting potential yield losses."

Holders

• Type: General
• Definition: Holders are individuals or entities that own shares or prediction market contracts in a prediction market, maintaining positions until resolution or sale.
• Usefulness: Tracking top holders on platforms like Polymarket can reveal whale sentiment, helping retail traders spot potential trends or manipulations.
• Example: "The largest holders in the election market on Polymarket shifted to Trump shares, driving the Yes price up 10% overnight."

I

Insider

(See also Leak)

• Type: Security
• Definition: An insider is a participant with non-public information about an event who trades on prediction markets, potentially gaining an unfair advantage.
• Usefulness: Insiders can temporarily distort market prices, but platforms monitor for unusual activity, which helps users avoid manipulated forecasts.
• Example: "Rumors of an insider leak caused a spike in the 'Yes' contract for the merger announcement on Kalshi before official news broke."

L

Leak

(See also Insider)

• Type: Security
• Definition: A leak refers to the premature disclosure of event-related information that influences prediction market prices before official resolution.
• Usefulness: Leaks can create short-term trading opportunities, but they also risk regulatory scrutiny. Traders should verify sources to avoid false signals.
• Example: "A leak about Biden's withdrawal sent the Harris nomination market on Polymarket surging 20% in minutes."

Limit

• Type: Trading
• Definition: A limit order is an instruction to buy or sell a contract at a specific price or better, allowing control over entry/exit points in volatile markets.
• Usefulness: Limit orders prevent emotional trading and ensure execution at desired probabilities, essential in fast-moving markets like elections.
• Example: "I placed a limit buy on the 'No' prediction market contract at 45¢ on Kalshi, securing my hedge without chasing the price up."

M

Market

• Type: General
• Definition: A market is a platform or category where users trade prediction markets based on event outcomes, aggregating liquidity and probabilities across various topics, such as politics or sports.
• Usefulness: Markets like Polymarket and Kalshi centralize trading, enhancing price discovery and enabling users to compare sentiments across various events.
• Example: "The overall market volume on Kalshi hit $728 million last week, driven by elections and sports markets."

Mover

• Type: Trading
• Definition: A mover is a prediction market or event whose price has shifted significantly, often due to news, indicating high volatility or new information.
• Usefulness: Spotting movers enables traders to react quickly to changes in sentiment, capitalizing on momentum in categories such as earnings or geopolitics.
• Example: "The biggest mover today on Polymarket was the tech market for 'AI regulation passed by year-end,' up 15% on policy rumors."

N

No

(See also Yes)

• Type: Trading
• Definition: 'No' is the binary contract outcome or share type that pays $1 if the specified event does not occur, priced inversely to the 'Yes' probability.
• Usefulness: Buying 'No' allows contrarian plays or hedges against favorites; in balanced markets, 'No' + 'Yes' prices sum to $1.
• Example: "I bought 'No' shares on the weather prediction market for 'Hurricane hits Florida in October' at 70¢ on Kalshi, profiting when it missed."

O

Order Book

• Type: Trading
• Definition: The order book is a real-time list of buy (bid) and sell (ask) orders for a contract, showing depth, liquidity, and price levels.
• Usefulness: Reviewing the order book on platforms like Kalshi reveals support/resistance levels, helping traders anticipate fills and market direction.
• Example: "The order book for the politics prediction market on Polymarket showed heavy bids at 50¢, suggesting strong support for that probability."

Outcome

(See also Resolution)

• Type: Trading
• Definition: An outcome is the final verified result of the event underlying a contract, determining which shares ('Yes' or 'No') pay out $1.
• Usefulness: Clear outcomes ensure fair settlements; understanding the criteria prevents disputes in complex markets, such as sports or earnings.
• Example: "The outcome for the earnings prediction market resolved to 'Miss' based on GAAP figures, invalidating all 'Beat' shares on Polymarket."

P

Platform

• Type: General
• Definition: A platform is the online exchange or app, such as Polymarket or Kalshi, where users create accounts, deposit funds, and trade prediction markets.
• Usefulness: Choosing a platform depends on whether it prioritizes regulation (Kalshi for US. fiat) or decentralization (Polymarket for crypto); each offers unique markets and tools.
• Example: "Kalshi is my go-to platform for regulated US prediction markets."

Politics

• Type: Markets
• Definition: Political markets involve event contracts on elections, policy decisions, and government actions, such as candidate wins or bill passages.
• Usefulness: These markets provide real-time polling alternatives and hedging tools for political risk, especially during election cycles. Since online sports betting on politics is forbidden in US sportsbooks, prediction market platforms like Kalshi and Polymarket provide unique opportunities.
• Example: "Politics markets on Kalshi exploded in volume during the 2024 election, accurately forecasting the winner days ahead."

Position

• Type: Trading
• Definition: A position is the total holdings of contracts in a user's account, either long (bullish on outcome) or short (bearish), representing exposure to an event.
• Usefulness: Managing positions allows for scaling trades or early exits; platforms track unrealized P&L to inform adjustments.
• Example: "My long position in the sports prediction contract for the NBA finals paid off with a 150% return after holding through volatility."

Projected

(See also Chance and Forecast)

• Type: Trading
• Definition: Projected refers to the anticipated or market-estimated result of an event, often used interchangeably with probability forecasts from prediction market prices.
• Usefulness: Projections help benchmark personal views against the crowd, guiding entry into undervalued prediction events.
• Example: "The projected outcome on Polymarket for Fed hikes shifted to 20% after the jobs data, prompting me to buy 'No' shares."

R

Redeem

(See also Resolution)

• Type: Payouts
• Definition: To redeem is the process of claiming payouts from winning contracts after resolution, converting shares to cash or crypto via the platform. Not to be confused with redeeming in sweepstakes casinos.
• Usefulness: Quick redemptions minimize holding risk post-event; understanding thresholds (e.g., minimums) ensures smooth withdrawals.
• Example: "I redeemed my winning 'Yes' shares from the weather prediction contract on Kalshi, receiving $1 per share in my bank account within 48 hours."

Resolution

(See also Outcome)

• Type: Payouts
• Definition: Resolution is the official determination and settlement of a market's outcome by the platform, triggering payouts for correct contracts.
• Usefulness: Transparent resolution rules build trust; disputes are rare but can delay payouts, so reviewing criteria upfront is key.
• Example: "Polymarket's resolution of the election market came hours after polls closed, based on AP calls, settling all prediction contracts fairly, in line with the actual results of the election."

S

Speculation

(See also Hedging)

• Type: Trading
• Definition: Speculation involves trading prediction market contracts based on expected price movements resulting from event outcomes, with the goal of generating profit rather than mitigating risk.
• Usefulness: Speculation drives liquidity and price discovery, but it carries a high risk; it's the primary activity for retail users seeking high returns.
• Example: "Speculation in the Tech markets on Kalshi for 'Bitcoin ETF approval' netted me a 200% profit."

Sports

• Type: Markets
• Definition: Sports markets encompass outcomes such as game winners, player statistics, or season results, often integrated with traditional betting through event contracts.
• Usefulness: These markets offer entertainment value and hedging opportunities for fans; Kalshi's sports contracts experienced significant growth in 2025 following legalization.
• Example: "The sports market on Kalshi for 'Chiefs win Super Bowl' traded at 25% the preseason, climbing to 60% mid-season."

T

Tech

• Type: Markets
• Definition: Tech markets focus on innovation and industry events, including product launches, regulatory approvals, and company milestones.
• Usefulness: Traders can speculate on sector trends; these markets provide early signals for stock movements in volatile areas, such as AI or cryptocurrency.
• Example: "The tech market on Polymarket for 'xAI valuation exceeds $50B by 2025' is at 45% Yes, betting on Grok's growth."

Trend

• Type: Trading
• Definition: A trend is a sustained directional movement in prediction market prices, often driven by news or volume, that indicates shifting probabilities.
• Usefulness: Identifying trends via charts helps time entries/exits; uptrends in Yes shares signal bullish sentiment on the event.
• Example: "A clear upward trend in the geopolitics market prompted me to add to my long position before the resolution."

V

Volatility

• Type: Trading
• Definition: Volatility measures the degree of price fluctuations in prediction markets, often heightened by news or low liquidity near event deadlines.
• Usefulness: High volatility creates opportunities for quick profits but also increases risk; understanding it aids in effective position sizing and stop-loss management.
• Example: "Volatility spiked in the politics market on Kalshi during debate season, with prices swinging 20% in hours."

W

Weather

• Type: Markets
• Definition: Weather markets trade on meteorological events, including temperature thresholds, storm occurrences, and precipitation levels.
• Usefulness: Farmers and insurers utilize these for hedging; they demonstrate the utility of prediction markets beyond finance into real-world risks.
• Example: "I traded the weather market on Kalshi for 'NYC snowfall over 10 inches in January,' hedging my travel plans."

Y

Yes

(See also No)

• Type: Trading
• Definition: 'Yes' is the binary prediction market contract outcome or share type that pays $1 if the specified event occurs, with its price reflecting the market's probability estimate.
• Usefulness: 'Yes' shares are straightforward for bullish bets; in efficient markets, they inversely correlate with 'No' for balanced trading.
• Example: "The 'Yes' contract for Oscar winners on Polymarket cost 30¢ and resolved to $1, giving a solid return on my culture bet."