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 the pricing mechanics and settlement procedures is essential for anyone serious about trading these instruments successfully.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Priced according to the market's current probability assessment.
• NO share: Delivers $1 should the event fail to occur. Priced at one minus the YES value.
• YES price + NO price = $1: The two always total $1 (with minor variance for spreads)

Consider this scenario: "Will inflation surpass 3% in Q3 2026?" When YES trades at $0.40, the market is pricing in a 40% likelihood of inflation exceeding 3%. Correspondingly, NO trades near $0.60, reflecting the 60% probability 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 event 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

The ceiling payout stands at $1 per share, irrespective of your acquisition cost:

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

Underdog YES bets deliver outsized profit potential but face steeper odds. Favourite NO positions yield modest gains paired with higher success odds.

Selling Before Resolution

Holding through settlement isn't mandatory. When price movement favours your position, exit early and pocket gains without awaiting final resolution:

• Acquired YES at $0.30, price climbs to $0.55 → liquidate immediately at $0.55/share and realise profit instantly
• Trade moving against you? Exit at prevailing market rates to minimise damage

Multi-Outcome Markets

Markets featuring three or more outcomes (such as "Who will be elected president in 2028?") assign a distinct YES/NO pair to each option. You may purchase YES on any contender — victory by your pick triggers $1 payout per share held.

FAQ

What happens to shares when a market resolves?

Successful shares instantly convert to $1 USDC each. Unsuccessful shares forfeit all value. The process executes automatically without user intervention.

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

Absolutely — traders employ this dual-position tactic to dampen volatility or capitalise on arbitrage gaps by securing predetermined profits.

What is the minimum share purchase?

PolyGram permits acquisitions starting from $1 in notional value at prevailing rates. No floor exists on the quantity of individual shares purchased.