What is Polymarket and how does it work?

What you buy on Polymarket

In a binary market, YES and NO represent the 2 possible answers to the contract question. Under an ordinary binary resolution, each winning stake can be redeemed for 1 USD and the losing one pays out 0 USD.

How to read a price

A hypothetical price of 0.40 USD per stake is usually read as an implied probability of 40%. It reflects the valuation expressed by the market's orders. The outcome remains uncertain.

The displayed quote is usually the midpoint between the best buy order and the best sell order. When the gap between them is wider than 0.10 USD, the interface shows the last traded price. The order you buy or sell with may execute at a different price.

What changes when you execute an order

The order book gathers the available buy and sell offers. A large order can consume several price levels and end up with an execution price different from the displayed reference. Check the offers available for the trade size you are considering.

The rules determine resolution

Before buying, read the full market rules. They set out the resolution source, the date from which it can be resolved and how ambiguous cases are handled. The question title summarises the event; the rules determine how the outcome will be decided.

Resolution mechanisms can vary and resolution can involve disputes. The calculation below assumes an ordinary final binary resolution and that you hold the stakes until that point.

Illustrative example with 100 contracts

Imagine you buy 100 YES contracts at an executable price of 0.40 USD each. The gross outlay is 100 × 0.40 = 40 USD. It is a hypothetical price chosen to explain the calculation, before fees and other costs.

If YES wins under the ordinary resolution, you receive 100 × 1 = 100 USD. Subtracting the 40 USD purchase, the gross gain is 60 USD. If YES loses, the payout is 0 USD and the gross loss is 40 USD. Both outcomes assume you hold the contracts until resolution.

Fees and other costs must be added to the calculation to get the net result. The example shows the 2 possible consequences of that purchase and lets you reproduce them with the contract calculator.

Costs and risk of loss

Some markets charge taker fees, that is, on whoever executes a trade against an available order. The parameters depend on the market and intermediaries may charge separate fees. Check the current parameters of the specific market before estimating the total cost.

In an ordinary binary resolution, a position held to the outcome can lose the entire gross outlay, plus any costs payable. The execution price and the rules that determine the outcome also matter. A high implied probability still leaves the possibility of loss.

Access to the international product and Polymarket US

Polymarket international publishes country and region restrictions, as well as categories where only position closing is allowed. Before trading, check the current restrictions and the applicable local rules. The absence of a country from a blocklist does not by itself confirm legal or promotional permission.

Polymarket US has separate documentation. Its access and trading terms require their own check; the international rules in this guide should not be carried over automatically to the US product.

How to continue your analysis

The prediction markets guide explains how prices and forecasts relate. The expected value explanation lets you compare your own estimate with the purchase price, and the contract calculator reproduces the 2 branches of the example. The availability and restrictions page gathers the access checks worth making before trading.