Quick answer
Prediction market: A prediction market is an exchange where people trade contracts whose payout depends on whether a future event happens, so the trading price can be read as the crowd's probability estimate.
Also called: event market, information market
Explained, with an example
On Polymarket, every share trades between $0.00 and $1.00 and winning shares redeem for $1, so a Yes price of $0.37 reads as roughly a 37% chance [1] [2]. In the US, regulated venues such as Kalshi are CFTC-designated contract markets (DCMs) [3]. Unlike a sportsbook, the venue matches traders against each other in an Order book instead of setting the price itself.
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Frequently asked questions
What is a prediction market?
A prediction market is an exchange where people trade contracts whose payout depends on whether a future event happens, so the trading price can be read as the crowd's probability estimate.
About this guide
Pred-Data publishes independent, source-linked explainers about prediction markets and the AI tools used around them. Every factual claim on this page links to a primary or reputable secondary source, checked on the date shown above. We do not run a trading venue, take bets, or give personal advice.
Author: Ken Lin · Corrections: if you spot an error, we review it and date-stamp the fix.
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Sources
- Prices & Orderbook — Polymarket Documentation, accessed 2 Nov 2026
- Resolution — Polymarket Documentation, accessed 2 Nov 2026
- CFTC Designates KalshiEX LLC as a Contract Market (4 Nov 2020) — U.S. CFTC, accessed 2 Nov 2026