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 instruments are valued and what returns look like represents the cornerstone of effective trading in prediction markets.

Basic Mechanics

• YES share: Worth $1 upon event occurrence. Traded at whatever probability the market currently reflects.
• NO share: Worth $1 if the event fails to occur. Consistently valued at the inverse of the YES price.
• YES price + NO price = $1: Combined, they invariably equal $1 (subject to minor bid-ask spreads)

Illustration: "Will inflation breach 3% during Q3 2026?" Suppose YES trades at $0.40—this signals the market assesses a 40% likelihood of inflation exceeding 3%. NO consequently trades near $0.60, reflecting the 60% chance it remains lower.

How to Read Probability from Price

A YES share's price directly corresponds to 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 (outsider bet)
• YES at $0.01 = 1% likelihood (improbable yet conceivable)

Calculating Your Returns

Each share delivers a maximum payout of $1, irrespective of purchase price:

• 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 returns but carry slimmer odds. Favoured NO positions yield modest gains paired with stronger winning odds.

Selling Before Resolution

Holding until market conclusion isn't mandatory. Should market conditions favour your position, exit early and pocket your gains:

• Acquired YES at $0.30, price climbs to $0.55 → liquidate immediately at $0.55/share without awaiting final settlement
• Trade moving against your thesis? Unwind at prevailing market rates to minimise losses

Multi-Outcome Markets

Markets encompassing three or more outcomes (such as "Which candidate will win the 2028 presidency?") feature separate YES/NO pairs for each option. 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 instantly convert to $1 USDC apiece. Unsuccessful shares forfeit all value. Payout processes automatically with no participant intervention needed.

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

Absolutely—traders employ this hedge strategy to dampen volatility or capitalise on arbitrage by securing a predetermined outcome.

What is the minimum share purchase?

PolyGram permits purchases commencing at $1 worth of shares at prevailing rates. No floor exists on individual share quantity.