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 instruments are valued and what returns look like represents the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Delivers $1 upon the event occurring. Its current market price reflects the probability assessment.
• NO share: Delivers $1 should the event fail to occur. Priced consistently at one minus the YES valuation.
• YES price + NO price = $1: Combined, they invariably total $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 a 60% probability 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 event materialises
• YES at $0.50 = 50% likelihood (even odds)
• YES at $0.10 = 10% likelihood (underdog scenario)
• YES at $0.01 = 1% likelihood (improbable yet theoretically possible)

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 returns paired with lower win probability. Favoured NO positions generate modest returns alongside elevated winning odds.

Selling Before Resolution

Holding through final settlement remains optional. Should market conditions shift favourably, exit your position early and realise gains:

• Purchased YES at $0.30, market shifts to $0.55 → liquidate immediately at $0.55/share without awaiting final outcome
• Trade moving against expectations? Minimise damage by selling at prevailing market rates

Multi-Outcome Markets

Markets presenting three or more possibilities (such as "Which candidate will secure the presidency in 2028?") feature separate YES/NO pairs for each option. You may purchase YES on whichever candidate you favour — your shares settle at $1 each if that candidate prevails.

FAQ

What happens to shares when a market resolves?

Successful shares receive automatic $1 USDC disbursement each. Unsuccessful shares forfeit all value. The settlement mechanism operates automatically — no participant intervention needed.

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

Absolutely — termed a hedged position. Traders occasionally maintain both to dampen volatility or capitalise on arbitrage spreads with locked-in returns.

What is the minimum share purchase?

PolyGram permits purchases beginning at $1 in current market value. No prescribed floor on share quantity exists.