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

All binary prediction markets contain precisely two possible outcomes, each represented by YES and NO shares. Grasping how these shares are valued and what returns look like upon settlement forms the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Delivers $1 upon the event materialising. Valued according to the market's current probability assessment.
• NO share: Delivers $1 should the event fail to occur. Priced at one minus the YES valuation.
• YES price + NO price = $1: Combined, they invariably total $1 (subject to minor bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Should YES trade at $0.40, participants are collectively estimating a 40% likelihood of inflation breaching the 3% threshold. NO consequently trades near $0.60, reflecting the 60% probability it remains subdued.

How to Read Probability from Price

A YES share's price directly mirrors the market's underlying 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 (unlikely scenario)
• YES at $0.01 = 1% likelihood (remote but conceivable)

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 gains but carry diminished winning odds. Favoured NO positions generate modest returns paired with elevated success probability.

Selling Before Resolution

Holding through to market conclusion isn't mandatory. Should price movement favour your position, you may exit early and crystallise gains:

• Purchased YES at $0.30, price climbs to $0.55 → liquidate at $0.55/share and realise profit immediately
• Position deteriorating? Exit at prevailing market rates to contain losses

Multi-Outcome Markets

Markets encompassing multiple outcomes (such as "Which candidate will win the 2028 presidential election?") feature separate YES/NO pairs for each option. You may purchase YES on any single option — should that option prevail, each YES share settles at $1.

FAQ

What happens to shares when a market resolves?

Successful shares instantaneously receive $1 USDC apiece. Unsuccessful shares forfeit all value. The settlement process operates automatically without requiring participant intervention.

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

Absolutely — termed a hedged position. Participants frequently maintain both sides to diminish risk exposure or capitalise on arbitrage opportunities with assured returns.

What is the minimum share purchase?

PolyGram permits acquisition of shares commencing at $1 in notional value at prevailing rates. No floor exists on the quantity of shares purchased.