Prediction Market Glossary
Prediction Market Glossary
A practical reference for the words that appear in prediction markets, event contracts and PredictFact analysis. Definitions are intentionally concise and may vary by platform or contract design.
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Ask Trading
The lowest price at which a seller is currently willing to sell. Together with the bid, it helps show the market’s executable price range.
Automated Market Maker (AMM) Mechanics
A pricing mechanism that uses formulas or pooled liquidity rather than matching every trade directly between a buyer and seller. Not all prediction markets use AMMs.
Binary market Contract
A market with two possible settlement outcomes, commonly YES and NO. The exact payout structure depends on the contract.
Bid Trading
The highest price a buyer is currently willing to pay for a contract or position.
Contract Core
The defined instrument tied to a future event or outcome. Its wording, payout and resolution rules determine what participants are actually trading.
Conditional market Contract
A market whose question or payout depends on another condition being met, such as an event happening only if a separate event occurs first.
Deadline Resolution
The time or date by which the specified event must occur, or the point at which the market stops considering new qualifying events, depending on its rules.
Event contract Core
A financial or forecasting contract whose value depends on the outcome of a future event. Regulatory treatment and product structure vary by jurisdiction and platform.
Fee Cost
A charge associated with using a platform or executing a transaction. Fees may include trading, settlement, deposit, withdrawal, blockchain or other charges.
Gas fee Blockchain
A network fee paid to process a blockchain transaction. Some products sponsor or abstract gas, while others require the user to pay it directly.
Market-implied probability Probability
The probability suggested by the market price under the contract’s pricing and payout structure. It reflects market pricing at that moment and is not a guarantee of the real-world outcome.
Keyless wallet Wallet
A wallet design that aims to remove or abstract the traditional single seed-phrase experience using alternative key-management technology. The exact security model differs by provider.
Limit order Trading
An instruction to buy or sell only at a specified price or better. Execution is not guaranteed if the market never reaches that price with available liquidity.
Liquidity Market quality
How readily a position can be bought or sold without causing a large price change. Deeper liquidity generally makes larger trades easier to execute near the market price.
Market maker Market structure
A participant or mechanism that supplies buy and sell liquidity. The exact role and incentives depend on the venue.
Market order Trading
An instruction intended to execute immediately against available prices. The final average price can differ from the headline quote, especially in thin markets.
Multi-outcome market Contract
A market with more than two listed outcomes, such as several candidates, price ranges or categories.
NO contract / NO position Outcome
A position that benefits under the contract rules when the specified event resolves NO. Exact mechanics depend on the market structure.
Oracle Resolution
A system or process used to bring real-world outcome information into a blockchain or smart-contract environment. Some prediction markets use oracle mechanisms in settlement or dispute resolution.
Order book Market structure
A list of current buy and sell orders at different prices and sizes. It helps show available liquidity beyond a single displayed probability.
Position Trading
A participant’s current economic exposure to one or more outcomes in a market.
Price impact Execution
The amount a trade changes the market price because of its size relative to available liquidity.
Probability Core
A numerical expression of uncertainty, commonly shown from 0% to 100%. A market-implied probability is specifically derived from market pricing rather than being a certainty statement.
Resolution Core
The process of determining the official outcome according to the market’s published rules, deadline and specified evidence source or procedure.
Resolution source Resolution
The named source or category of evidence the market uses to determine the official result—for example an agency release, election authority, league result or court record.
Settlement Core
The financial or account process that follows resolution, when winning and losing positions are finalized according to the contract terms.
Slippage Execution
The difference between an expected trading price and the actual average execution price, often caused by limited liquidity or market movement.
Smart contract Blockchain
Code deployed on a blockchain that executes defined rules. On-chain prediction-market products may use smart contracts for trading, custody, settlement or other functions.
Spread Market quality
The difference between the best bid and the best ask. A wide spread can make the cost of entering or exiting a position materially different from a simple headline probability.
Stablecoin Blockchain
A crypto asset designed to track a reference value, commonly a fiat currency. Stablecoins can introduce issuer, reserve, depegging, custody and network risks.
Volume Market activity
The amount of trading activity reported over a period or over the life of a market, depending on how the platform defines and displays the metric.
YES contract / YES position Outcome
A position that benefits under the contract rules when the specified event resolves YES. Exact mechanics and payouts depend on the contract.
Definitions make more sense in context
How Prediction Markets Work
See how the question, contract, price, liquidity and resolution process fit together.
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Source note
Definitions are written in plain English for PredictFact and cross-checked against common market usage and CFTC educational material. Platform-specific definitions may differ, so current contract rules and platform documentation take priority for an individual market.