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

Every binary prediction market contains precisely two possible outcomes, each represented by YES and NO shares. Grasping how these instruments are valued and what their settlement mechanics entail is essential for anyone looking to trade prediction markets profitably.

Basic Mechanics

• YES share: Delivers $1 upon the event's occurrence. Trades at whatever the market deems the probability to be.
• NO share: Delivers $1 should the event fail to occur. Priced consistently at one minus the YES quotation.
• YES price + NO price = $1: These two always combine to equal $1 (subject to minor bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Suppose YES trades at $0.40. The market is signalling a 40% likelihood that inflation will exceed 3%. Conversely, NO would trade near $0.60, reflecting the market's 60% assessment that inflation remains subdued.

How to Read Probability from Price

A YES share's price directly reflects what the market believes the probability is:

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

Calculating Your Returns

Each share you own delivers a maximum payout 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 bets deliver outsized gains but face longer odds. Favourite NO positions yield modest gains paired with superior win probability.

Selling Before Resolution

Settlement need not occur for you to realise gains. Should sentiment shift favourably, you may exit your position early and pocket profits immediately:

• Entered YES at $0.30, market rallies to $0.55 → liquidate at $0.55 per share and capture gains without awaiting final settlement
• Trade moving against you? Sell at prevailing rates to minimise losses

Multi-Outcome Markets

When markets present three or more possible resolutions (such as "Which party will control the presidency in 2028?"), each contender receives their own YES/NO pair. You may back any contender via YES shares — victory for your selection yields $1 per share held.

FAQ

What happens to shares when a market resolves?

Successful shares instantaneously receive $1 USDC per unit. Unsuccessful shares forfeit all value. The system handles settlement mechanically with zero manual intervention needed.

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

Absolutely — termed a hedge position. Sophisticated traders occasionally maintain both sides to dampen volatility or capitalise on pricing discrepancies.

What is the minimum share purchase?

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