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Polyblock
Trading

Understanding Markets

Learn how prediction markets work, how prices reflect probabilities, and how to interpret market data for better trading decisions.

How Prediction Markets Work

Prediction markets are exchanges where you trade shares based on the outcome of future events. Each market has two outcomes: YES and NO.

Binary Outcomes

Every market resolves to either YES (1.00) or NO (0.00). There are no partial outcomes — it's all or nothing.

Full Collateralization

YES + NO shares always equal $1.00. If you own both a YES and NO share, you're guaranteed to receive $1.00 regardless of outcome.

In a "Will BTC close above $100k?" market, YES shares pay $1.00 if BTC closes above $100k, and NO shares pay $1.00 if it doesn't.

Price as Probability

Market prices directly reflect the crowd's estimated probability of each outcome:

Interpreting Prices

A YES share priced at $0.65 means the market estimates a 65% probability that the event will occur. A NO share would be priced at $0.35.

Finding Value

If you believe the true probability is higher than the market price, buying that share has positive expected value.

If you think an event has 80% chance but YES trades at $0.65, your expected value is (0.80 × $1.00) - $0.65 = $0.15 per share.

Market Resolution

Markets resolve when the predicted event either occurs or the deadline passes:

Automatic Resolution

Crypto price markets resolve automatically based on oracle data at the specified candle close time.

Payout

Winning shares receive $1.00 USDC.e each. Losing shares expire worthless. Payouts are automatic — no action required.

Redemption

After resolution, you can redeem your winning shares for USDC.e through the trading panel or automatically.

Liquidity and the order book

A prediction market price is only actionable if you can trade size near that price. Thin books mean your market order walks through multiple levels, while limit orders may sit unfilled if nobody crosses the spread. On Polyblock the live CLOB view is the source of truth—use depth, not just mid, when you plan entries and exits.

Spread and implied cost

Entering at the ask and exiting at the bid pays the round-trip spread on top of any platform fees. On short windows (for example 5-minute markets) spreads can widen sharply around resolution or news; size down or use patience with limits when the book is empty.

If YES and NO are both liquid, compare which side offers better effective entry after fees and expected hold time—sometimes the “obvious” side is more expensive once the book is visible.

Market Selection

Polyblock offers various crypto price prediction markets:

Asset Pairs

Trade predictions on BTC, ETH, SOL, and other major cryptocurrencies.

Timeframes

Choose from 5-minute (5m), 15-minute (15m), or 1-hour (1h) prediction windows. Polymarket now offers 5M for all assets (BTC, ETH, SOL, XRP) — see the 5M markets launch for details. Shorter timeframes are more volatile but resolve faster.

Some markets may have thin orderbooks. Check the spread and depth before placing large orders.

Common pitfalls

Treating mid as executable

The midpoint between best bid and ask is a handy summary, but you cannot assume you will buy at mid in size. Always reference the ask for buys and the bid for sells when you stress-test a trade idea.

Ignoring time to resolution

A contract priced at $0.48 with five minutes left behaves differently from the same price with an hour left—theta and uncertainty collapse as the oracle window approaches. Match your horizon to the product you are trading.

Confusing platform fees with payout

Platform fees apply to trading and claims as described in the Fees page. Resolution still pays $1.00 per winning share before any claim step—plan liquidity for fees so automation and manual orders do not fail.

Terminal Overview5-Minute (5M) Markets