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 their pricing mechanics and settlement procedures represents the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Trades at the market's current probability assessment.
• NO share: Delivers $1 if the event fails to occur. Consistently trades at one minus the YES valuation.
• YES price + NO price = $1: Combined value perpetually equals $1 (with minor variance for bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Should YES trade at $0.40, the market suggests a 40% likelihood of inflation exceeding 3%. NO consequently trades near $0.60 (reflecting 60% odds of remaining below that threshold).

How to Read Probability from Price

A YES share's price directly reflects the market's probability assessment:

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

Calculating Your Returns

Each share yields a maximum payout of $1, irrespective of acquisition cost:

• Purchase 100 YES shares at $0.30 → outlay $30 → upon YES resolution: collect $100 (gain: $70, yield: 233%)
• Purchase 100 NO shares at $0.70 → outlay $70 → upon NO resolution: collect $100 (gain: $30, yield: 43%)

Underdog YES positions deliver substantially higher upside but carry diminished winning odds. Favoured NO positions generate modest returns paired with elevated success probability.

Selling Before Resolution

Holding until final settlement remains optional. Should market sentiment shift favourably, liquidate your position early and realise gains immediately:

• Acquired YES at $0.30, price climbs to $0.55 → exit immediately at $0.55/share, bypassing the waiting period
• Trade deteriorating? Minimise damage by exiting at prevailing market rates

Multi-Outcome Markets

Markets featuring three or more outcomes (such as "Which candidate will claim the presidency in 2028?") assign individual YES/NO pairs to each option. Purchase YES on your preferred outcome — victory triggers $1 per share redemption.

FAQ

What happens to shares when a market resolves?

Successful shares instantaneously convert to $1 USDC each. Unsuccessful shares forfeit all value. The procedure executes autonomously — participant intervention proves unnecessary.

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

Absolutely — termed a hedged position. Market participants frequently employ this tactic to mitigate volatility or capitalise on arbitrage discrepancies by securing predetermined returns.

What is the minimum share purchase?

PolyGram permits acquisition of positions starting from $1 in current valuation. No threshold exists regarding minimum share quantities.