YES and NO Shares in Prediction Markets: Complete Guide

All binary prediction markets consist of precisely two possible outcomes, each represented by YES and NO shares. Grasping their pricing mechanics and settlement processes forms the cornerstone of effective trading in these markets.

Basic Mechanics

YES share: Delivers $1 upon event occurrence. Valued according to the market's current probability assessment.
NO share: Delivers $1 if the event fails to occur. Priced at the complement of the YES value.
YES price + NO price = $1: Combined, they consistently equal $1 (with minor variance for bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Should YES trade at $0.40, the market signals a 40% likelihood of inflation exceeding 3%. Correspondingly, NO trades near $0.60, reflecting the 60% probability it remains lower.

How to Read Probability from Price

A YES share's price directly reflects the market's probability assessment:

YES at $0.90 = 90% likelihood the outcome materialises
YES at $0.50 = 50% likelihood (even odds)
YES at $0.10 = 10% likelihood (unlikely scenario)
YES at $0.01 = 1% likelihood (improbable yet conceivable)

Calculating Your Returns

Each share yields a maximum payout of $1, irrespective of acquisition cost:

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%)

Speculative YES positions deliver superior return potential alongside diminished winning odds. Favoured NO positions produce modest gains paired with stronger success probability.

Selling Before Resolution

Holding through market conclusion remains optional. Should conditions favour your position, liquidate shares ahead of time to capture gains:

Purchased YES at $0.30, market advances to $0.55 → exit at $0.55/share, realising profit immediately
Facing unfavourable movement? Exit at prevailing rates to minimise losses

Multi-Outcome Markets

Markets encompassing three or more outcomes (such as "Which candidate will win the 2028 presidential election?") assign distinct YES/NO pairs to each option. You may purchase YES on your preferred option — upon that option's victory, your YES shares settle at $1 apiece.

FAQ

What happens to shares when a market resolves?: Successful shares automatically transfer $1 USDC per unit. Unsuccessful shares forfeit all value. The process executes automatically with no participant involvement needed.
Can I hold both YES and NO shares in the same market?: Certainly — traders refer to this as a hedge. Some market participants maintain both positions to minimise volatility exposure or capitalise on arbitrage pricing discrepancies.
What is the minimum share purchase?: On PolyGram, investments commence at $1 of value at prevailing rates. No minimum quantity threshold applies.