What Are Prediction Markets? How They Work, Examples & Where to Trade

What Is a Prediction Market?

A prediction market is a venue where people trade contracts whose payoff depends on whether a future event happens (YES) or not (NO). Unlike stocks or crypto, you’re not buying a share of a company or a token—you’re buying an outcome. If the event occurs and you held YES, you typically get a fixed payout (often $1 per share); if you held NO and the event didn’t occur, you get the same. The market price of YES (e.g. 60¢) represents the crowd’s implied probability that the event will happen (60%). By aggregating many traders’ beliefs and money, prediction markets often produce accurate probability estimates. For how to copy top traders on these markets, see copy trading in prediction markets.

How Do Prediction Markets Work?

Most prediction markets use binary contracts: one side is YES (the event happens), the other is NO (it doesn’t). YES and NO prices usually sum to 100¢ (or 100%). You buy at the current price; when the event resolves, the winning side pays out (e.g. $1 per share) and the losing side expires worthless. Trading happens on an order book: buyers and sellers set bids and asks, and prices move with supply and demand.

Order books list live buy and sell orders; you can take an existing order or place your own. Liquidity and fees vary by platform. Because prices are money-backed, prediction markets aggregate information and often track or beat polls and pundits. For a step-by-step on trading (and copying) on the largest platform, see how to copy trade on Polymarket.

Prediction Market Examples by Category

Prediction markets exist for a wide range of events. The table below shows common categories and typical questions you might trade on platforms like Polymarket and MetaMask Prediction Markets.

Markets resolve according to predefined rules (e.g. official election result, final score, oracle data). Winners receive the payout (e.g. $1 per share); losers get nothing. For strategies and category focus when copying traders, see Polymarket strategies: politics, crypto & sports.

Where to Trade Prediction Markets

The table below summarizes major venues where you can trade prediction markets. Availability and regulations vary by country; many platforms restrict access in the US, UK, and some other regions.

To copy top Polymarket (and thus MetaMask) traders instead of picking markets yourself, use a leaderboard filtered by win rate and PnL, then get copy-ready playbooks. HolyPoly ranks wallets by performance and gives you BUY/SELL instructions; you execute on Polymarket or MetaMask Prediction Markets. You can start with 3 free wallets to copy and see the leaderboard.

Frequently Asked Questions: Prediction Markets

What is a prediction market?

A prediction market is a platform where you trade on the outcomes of future events—elections, sports, crypto, culture. You buy YES or NO shares; if your side wins, you typically receive $1 per share. Prices reflect the crowd’s probability estimate, and trading happens on an open order book where supply and demand set the odds.

How do prediction markets work?

Prediction markets use binary contracts: YES (event happens) and NO (event doesn’t). Each share usually pays $1 if correct and $0 if wrong. You buy at the current price (e.g. 60¢ for YES implies a 60% chance). Trading happens on an order book; prices move as people trade. When the event resolves, winning shares pay out and losing ones expire worthless.

Where can I trade prediction markets?

You can trade on Polymarket (web) and MetaMask Prediction Markets (in-app, powered by Polymarket), plus other platforms like Kalshi (US regulated). Availability varies by country—many restrict access in the US, UK, and some other regions.

What are examples of prediction markets?

Examples include political markets (will X win the election?), sports (will team A win?), crypto (will Bitcoin be above $Y on date Z?), and culture (will this film win the Oscar?). Markets resolve when the real-world event completes; winners receive $1 per share, losers get nothing.