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

Every binary prediction market consists of precisely two outcomes, each represented by YES and NO shares. Grasping their pricing mechanics and settlement procedures forms the cornerstone of effective prediction market participation.

Basic Mechanics

• YES share: Settles at $1 upon event confirmation. Its current market price reflects the consensus probability.
• NO share: Settles at $1 if the event fails to occur. Its price equals one minus the YES price.
• YES price + NO price = $1: These two always total $1 (subject to minor bid-ask spread variations)

Consider this scenario: "Will inflation breach 3% during Q3 2026?" Suppose YES trades at $0.40 — this signals the market assigns a 40% likelihood to inflation surpassing 3%. Conversely, NO trades near $0.60, representing a 60% market view that inflation remains subdued.

How to Read Probability from Price

A YES share's market price directly corresponds to the collective probability assessment:

• YES at $0.90 = 90% likelihood the event materialises
• YES at $0.50 = 50% likelihood (equally uncertain)
• YES at $0.10 = 10% likelihood (improbable scenario)
• YES at $0.01 = 1% likelihood (remote but theoretically possible)

Calculating Your Returns

Each share delivers a maximum settlement value of $1, irrespective of entry price:

• 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%)

Contrarian YES bets yield amplified returns alongside diminished win odds. Consensus NO positions generate modest gains paired with elevated success probability.

Selling Before Resolution

Market expiration need not be your exit point. Should prices shift favourably, liquidate your holdings early and realise gains without awaiting final settlement:

• Entered YES at $0.30, market rallied to $0.55 → exit at $0.55/share, capturing profit instantaneously
• Trade deteriorating? Mitigate damage by offloading at prevailing rates

Multi-Outcome Markets

Markets encompassing three or more outcomes (such as "Which party will control the presidency post-2028?") feature distinct 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 receive automatic $1 USDC disbursement each. Unsuccessful shares forfeit value entirely. The settlement process executes without manual intervention.

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

Absolutely — traders employ this dual-position strategy to dampen volatility or capitalise on mispricing spreads by locking in riskless gains.

What is the minimum share purchase?

PolyGram permits purchases starting from $1 notional value at active market rates. No floor exists on share quantity.