Buying and Selling Shares
Learn how to effectively buy and sell shares on Public Wager, including strategies for timing your trades and maximizing returns.
Understanding Share Trading
Unlike traditional betting where you're locked in until resolution, prediction markets let you trade your position at any time.
Key Benefits
- 🔄 Exit early: Sell before market resolves
- 💰 Lock in profits: Secure gains without waiting
- 🛡️ Cut losses: Exit if your prediction looks wrong
- 📈 Trade price movements: Profit from volatility
Buying Shares
When to Buy
Consider buying when:
- ✅ You have information others don't
- ✅ The market seems mispriced
- ✅ Recent news supports your position
- ✅ Price has dipped but fundamentals remain strong
Buy Strategies
Buy and Hold
Strategy: Purchase shares and hold until resolution
Best for:
- High-conviction predictions
- Markets with clear information
- Long-term patience
Example: You're certain a political candidate will win, buy YES at $0.65 and hold.
Dollar-Cost Averaging
Strategy: Buy same dollar amount at regular intervals
Best for:
- Reducing timing risk
- Long-term markets
- Volatile prices
Example: Buy $50 of YES shares every week for 4 weeks instead of $200 all at once.
Buying the Dip
Strategy: Purchase when price drops temporarily
Best for:
- Markets you're already watching
- Temporary panic selling
- Technical traders
Example: YES price drops from $0.70 to $0.60 on unfounded rumor, you buy the dip.
Selling Shares
When to Sell
Consider selling when:
- ✅ Price has increased and you want to lock profit
- ✅ New information changes your prediction
- ✅ You need to free up capital
- ✅ Market fundamentals have shifted
Sell Strategies
Profit Taking
Strategy: Sell when you've achieved target return
Best for:
- Disciplined traders
- Achieving specific returns
- Risk management
Example: Set 20% profit target, sell when reached regardless of further potential.
Stop Loss
Strategy: Sell if price drops below threshold
Best for:
- Protecting capital
- Limiting downside
- Emotional discipline
Example: Buy at $0.60, set stop loss at $0.50 to limit losses to 16.7%.
Scaling Out
Strategy: Sell portions of position at different prices
Best for:
- Reducing risk gradually
- Uncertain outcomes
- Volatile markets
Example: Hold 300 shares. Sell 100 at $0.70, 100 at $0.80, keep 100 until resolution.
Price Movements and Timing
Understanding Price Changes
Prices move based on:
- New Information: News, data, announcements
- Supply/Demand: More buyers = higher prices
- Time Decay: Approaching resolution increases certainty
- Market Sentiment: Crowd psychology shifts
Reading Price Momentum
Uptrend (Bullish)
Price: $0.50 → $0.55 → $0.62 → $0.68
Signals:
- Growing confidence in YES
- Positive news flow
- Increasing volume
Action: Consider buying if you agree, or taking profits if you already hold
Downtrend (Bearish)
Price: $0.75 → $0.70 → $0.63 → $0.58
Signals:
- Decreasing confidence in YES
- Negative developments
- Selling pressure
Action: Consider selling to cut losses, or buying if you think it's oversold
Sideways (Consolidation)
Price: $0.60 ↔ $0.62 ↔ $0.61 ↔ $0.60
Signals:
- Market consensus stable
- Waiting for new information
- Low volatility
Action: Wait for breakout, or accumulate if you have edge
Calculating Returns
Profit from Buying Low, Selling High
Example Trade:
- Buy 100 YES shares at $0.55 = $55 investment
- Sell 100 YES shares at $0.75 = $75 proceeds
- Profit = $75 - $55 = $20 profit (36% return)
Maximum Returns
Your returns are capped at $1.00 per share:
| Buy Price | Sell Price | Return | Sell at $1.00 | Max Return |
|---|---|---|---|---|
| $0.30 | $0.50 | 67% | $1.00 | 233% |
| $0.50 | $0.70 | 40% | $1.00 | 100% |
| $0.70 | $0.85 | 21% | $1.00 | 43% |
Break-Even Analysis
Calculate your break-even price:
Break-Even = Purchase Price + Fees
Example:
- Buy at $0.60
- Fees: 2% ($0.012)
- Break-even: $0.612
You need price above $0.612 to profit.
Order Execution
Market Orders
Executes immediately at best available price
Pros:
- ✅ Guaranteed execution
- ✅ Instant fill
- ✅ Simple to use
Cons:
- ❌ Price may slip on large orders
- ❌ Less control over price
- ❌ Can be expensive in volatile markets
Best for: Quick trades, liquid markets, urgent execution
Limit Orders
Executes only at specified price or better
Pros:
- ✅ Price control
- ✅ Better for large orders
- ✅ Avoid overpaying
Cons:
- ❌ May not fill
- ❌ Can miss opportunities
- ❌ Requires patience
Best for: Patient traders, specific price targets, illiquid markets
Example: Market vs Limit Order
Scenario: Current YES price is $0.65
Market Order:
- You buy immediately at $0.65
- Guaranteed execution
- Start at current price
Limit Order:
- You set limit at $0.60
- Only buys if price drops to $0.60
- May never fill if price stays above
The Order Book
Understanding Depth
The order book shows pending orders:
Bid Side (Buyers):
$0.64 - 500 shares
$0.63 - 300 shares
$0.62 - 200 shares
Ask Side (Sellers):
$0.66 - 400 shares
$0.67 - 300 shares
$0.68 - 500 shares
Spread
The difference between best bid and ask:
Best Bid: $0.64
Best Ask: $0.66
Spread: $0.02 (2 cents)
Tight spreads = Liquid market Wide spreads = Illiquid market
Using the Order Book
- Check depth before large orders
- Place limits between bid/ask to save on spread
- Watch for walls - large orders that may stop price movement
Advanced Trading Techniques
Arbitrage
Strategy: Exploit price differences between related markets
Example:
- Market A: "Team wins" YES at $0.60
- Market B: "Team loses" NO at $0.45
- Combined cost: $1.05 → Guaranteed $1.00 payout
- Not true arbitrage, but close
Hedging
Strategy: Reduce risk by taking opposite positions
Example:
- You hold 100 YES shares bought at $0.40
- Price rises to $0.75
- Buy 50 NO shares at $0.25 to hedge
- Guaranteed profit regardless of outcome
Swing Trading
Strategy: Capture short-term price swings
Best for:
- Active traders
- Volatile markets
- News-driven events
Example: Buy at $0.50, sell at $0.60, repeat on price cycles
Risk Management
Position Sizing
Never risk too much on one trade:
Conservative: 1-2% of portfolio per trade
Moderate: 3-5% of portfolio per trade
Aggressive: 5-10% of portfolio per trade
Diversification
Spread risk across:
- Different markets
- Different categories
- Different time horizons
- Different probability ranges
Setting Stop Losses
Protect your capital:
Example Strategy:
- Entry: $0.60
- Stop Loss: $0.50 (Max 16.7% loss)
- Target: $0.80 (33% profit)
- Risk/Reward Ratio: 1:2
Trading Psychology
Avoid Common Pitfalls
Overtrading
Problem: Making too many trades, increasing fees and mistakes
Solution: Be selective. Quality over quantity.
Revenge Trading
Problem: Trying to quickly recover losses with bigger bets
Solution: Take a break after losses. Stick to your strategy.
FOMO (Fear of Missing Out)
Problem: Jumping into trades because everyone else is
Solution: Do your own research. Don't chase price movements.
Confirmation Bias
Problem: Only seeing information that supports your position
Solution: Actively seek contrary viewpoints. Be objective.
Tracking Your Trades
Trade Journal
Record every trade:
- Date and time
- Market and outcome
- Entry price and size
- Reason for trade
- Exit price and result
- Lessons learned
Performance Metrics
Track key stats:
- Win Rate: % of profitable trades
- Average Return: Mean profit per trade
- Sharpe Ratio: Risk-adjusted returns
- Maximum Drawdown: Biggest losing streak
Tax Considerations
Record Keeping
Keep records of:
- All buys and sells
- Dates and amounts
- Profits and losses
- Fees paid
Note: Consult a tax professional about reporting requirements in your jurisdiction.
Mobile Trading Tips
Quick Actions on Mobile
- Use preset order amounts ($10, $25, $50)
- Enable fingerprint for fast login
- Set price alerts for target entry/exit
- Swipe gestures for quick buy/sell
Managing on the Go
- Check positions during commute
- Set stop losses before major news
- Use limit orders overnight
- Enable push notifications for fills
Next Steps
Ready to take control of your portfolio?
- Portfolio Management Guide - Track and optimize
- Understanding Fees - Know the costs
- Market Types - Different formats
Need Help?
- Calculator: Use our profit calculator
- Questions: See the FAQ
- Support: Email support@publicwager.com
Ready to learn about portfolio management? Continue to the next guide →