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

All binary prediction markets consist of precisely two possible outcomes, each represented by YES and NO shares. Grasping how these shares are valued and what settlement looks like is essential for anyone looking to trade prediction markets effectively.

Basic Mechanics

• YES share: Settles at $1 upon event occurrence. Trades at a price reflecting the market's implicit likelihood.
• NO share: Settles at $1 if the event fails to occur. Priced at one minus the YES share's value.
• YES price + NO price = $1: These two always combine to equal $1 (with minor variation for trading spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Suppose YES trades at $0.40, this signals the market assesses a 40% chance inflation breaches that threshold. NO consequently trades near $0.60, representing the 60% likelihood it remains lower.

How to Read Probability from Price

A YES share's market price directly corresponds to the probability the market assigns:

• 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 theoretically possible)

Calculating Your Returns

Each share yields a maximum settlement value of $1, irrespective of your entry price:

• Acquire 100 YES shares at $0.30 → outlay $30 → should YES resolve true: collect $100 (gain: $70, yield: 233%)
• Acquire 100 NO shares at $0.70 → outlay $70 → should NO resolve true: collect $100 (gain: $30, yield: 43%)

Underdog YES positions deliver outsized gains but face steeper odds. Favoured NO positions provide modest gains paired with higher success probability.

Selling Before Resolution

Holding through market resolution is optional. Should price movement favour your position, exit early and realise gains:

• Entered YES at $0.30, price climbed to $0.55 → liquidate for $0.55 per share, capturing profit immediately
• Trade deteriorating? Reduce exposure by selling at prevailing market rates

Multi-Outcome Markets

Markets featuring three or more options (such as "Which candidate will win the 2028 presidential election?") grant each contender a distinct YES/NO pair. You may purchase YES on whichever candidate you favour — victory triggers $1 payout per share held.

FAQ

What happens to shares when a market resolves?

Successful shares receive $1 USDC automatically upon resolution. Unsuccessful shares forfeit all value. The settlement process executes without user intervention required.

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

Absolutely — termed a hedge. Traders occasionally maintain both positions to dampen volatility or capitalise on arbitrage inefficiencies.

What is the minimum share purchase?

PolyGram permits purchases starting from $1 in notional value at prevailing prices. No floor exists on the quantity of shares you must acquire.