Imagine a stock market, but instead of trading company shares, you're trading on whether specific events will happen. That's a prediction market in a nutshell.
Example: "Will it rain tomorrow?"
Here's the key insight: share prices represent probabilities.
If YES shares cost $0.70, the market is saying there's a 70% chance the event happens.
If NO shares cost $0.30, that's a 30% chance it doesn't happen.
YES + NO always equals $1.00.
When you buy shares:
Example:
Market: "Will Bitcoin hit $100k by end of year?"
Current Price: YES at $0.45, NO at $0.55
You Buy: 100 YES shares at $0.45 = $45 cost
When the event concludes:
If you're right:
You bought 100 YES shares for $45
Bitcoin hits $100k ✓
Your payout: 100 × $1.00 = $100
Your profit: $100 - $45 = $55
If you're wrong:
You bought 100 YES shares for $45
Bitcoin doesn't hit $100k ✗
Your payout: 100 × $0 = $0
Your loss: $45
Market prices move based on:
This creates opportunities! If you have better information or analysis than the market, you can profit.
Here's where it gets interesting. Prediction markets are often more accurate than expert predictions because they aggregate everyone's knowledge.
Research shows prediction markets outperform:
The simplest format:
Will the bill pass? YES or NO
Will Team A win? YES or NO
Will stock hit $100? YES or NO
Pick from several options:
Who will win the election?
- Candidate A: $0.45
- Candidate B: $0.35
- Candidate C: $0.20
Predict a specific number:
What will Q4 revenue be?
Range: $80M - $100M
Unlike traditional bets, you can sell anytime:
Day 1: Buy YES at $0.40
Day 15: Price rises to $0.70
You Sell: 75% profit without waiting for resolution!
Day 1: Buy YES at $0.60
Day 10: New info, price drops to $0.35
You Sell: Take 42% loss instead of potential 100% loss
Smart traders think in expected value:
Market Price: $0.60 (60% probability)
Your Analysis: 75% chance it happens
If your analysis is right, this bet has positive expected value!
Like any investment, don't put all eggs in one basket:
Wrong: "I'm a big fan, so I'll bet YES"
Right: "Objectively, what's the probability?"
Wrong: "I think it'll happen, so I'll buy YES at $0.90"
Right: "Even if it happens, I only profit $0.10 per share. Is that worth the risk?"
Wrong: Assuming you know how it'll resolve
Right: Reading exactly how the market will be decided
Wrong: Making dozens of trades daily
Right: Quality over quantity - trade when you have an edge
Ready to try prediction markets?
Prediction markets are used for:
Prediction markets turn the question "What will happen?" into:
Prediction markets are powerful tools for:
The best way to learn is by doing. Start with small trades, learn from each one, and gradually build your understanding and strategy.
Have questions? Check our FAQ or email support@publicwager.com.
Happy forecasting! 🎯
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]]>Our documentation is organized to help you learn progressively:
Brand new to prediction markets? Start here:
Ready to start trading?
Want to create your own prediction markets?
Understand all the tools at your disposal:
Quick answers and definitions:
Public Wager is a prediction market platform where you can bet on real-world events. From politics to sports, business to crypto, we turn uncertainty into tradeable markets.
How it works:
The power of prediction markets lies in the wisdom of crowds - when many people trade based on their knowledge, the market price becomes an incredibly accurate forecast.
We believe that prediction markets should be accessible to everyone, not just Wall Street professionals. Our goal is to:
This documentation is a living resource. We'll be:
Ready to dive in? Here's your path:
Have questions? Check our FAQ or reach out to support@publicwager.com.
Welcome to the future of forecasting. Welcome to Public Wager! 🎯
The Public Wager Team
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