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 their pricing mechanics and settlement procedures represents the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Valued according to the market's current probability assessment.
• NO share: Delivers $1 if the event fails to occur. Invariably valued at one minus the YES valuation.
• YES price + NO price = $1: Combined value consistently equals $1 (subject to minor spread variations)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Should YES trade at $0.40, the market suggests a 40% likelihood of inflation breaching that threshold. NO consequently trades near $0.60 (reflecting a 60% probability it remains lower).

How to Read Probability from Price

A YES share's price directly reflects 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 (unlikely scenario)
• YES at $0.01 = 1% likelihood (improbable yet theoretically possible)

Calculating Your Returns

Each share yields a maximum settlement value of $1, independent of acquisition cost:

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

Underdog YES positions deliver outsized returns alongside diminished odds. Favoured NO positions generate modest returns paired with stronger winning probabilities.

Selling Before Resolution

Retention until final settlement remains optional. Should market conditions shift favourably, you may exit positions early and realise gains:

• Purchased YES at $0.30, market advances to $0.55 → liquidate immediately at $0.55/share, capturing profit without awaiting conclusion
• Position deteriorating? Minimise losses by exiting at prevailing market valuation

Multi-Outcome Markets

Markets featuring multiple outcomes (such as "Which candidate will prevail in the 2028 presidential election?") assign individual YES/NO pairs to each option. You may purchase YES on any contender — victory by your selection triggers $1 per share redemption.

FAQ

What happens to shares when a market resolves?

Successful shares instantaneously convert to $1 USDC each. Unsuccessful shares forfeit all value. The conversion occurs mechanically without participant intervention.

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

Absolutely — termed a hedge strategy. Participants frequently maintain simultaneous positions to dampen volatility or capitalise on arbitrage inefficiencies between different platforms.

What is the minimum share purchase?

PolyGram permits acquisitions commencing at $1 in notional value at prevailing rates. No floor exists on share quantity.