What is a prediction market?
How people trade on the outcome of future events, and what the prices tell you.
ExplainerThe basics
A prediction market lets people trade on the outcome of a future event, such as an election, a match, an economic report or an awards night. Each contract asks a yes or no question.
How a contract works
A contract usually pays a fixed amount, often $1, if the outcome happens, and nothing if it does not. Prices sit between 0 and 100 cents. A contract trading at 30 cents suggests the market sees roughly a 30% chance of that outcome.
Prices move in real time
As traders buy and sell, prices change. Traders can sell before the event if they change their mind or want to lock in a gain.
Who runs them
In the US, regulated exchanges such as Kalshi operate under the oversight of the Commodity Futures Trading Commission. Other platforms, such as Polymarket, also run international markets.
A fast-growing market
Macquarie forecasts $187bn in prediction market volume in 2026, 8.5 times the 2025 total, according to SiGMA.
