Prediction Market Returns Calculator: How Much Can You Make on Each Trade?

Every wager placed in a prediction market boils down to a simple expected value assessment. Master this calculation and you'll never place a bet without knowing your precise win threshold, required accuracy rate, and the probability needed to stay profitable.

Basic Return Calculation

When you purchase a YES share at price P:

• Win return: (1 - P) / P × 100% = your percentage gain should YES occur
• Loss: 100% of your initial investment if NO occurs
• Break-even probability: P (the market price doubles as your break-even threshold)

Examples:

• YES at $0.20: win = +400%, break-even = 20%
• YES at $0.50: win = +100%, break-even = 50%
• YES at $0.75: win = +33%, break-even = 75%
• YES at $0.90: win = +11%, break-even = 90%

Expected Value Formula

EV = (Your probability × Win amount) - ((1 - Your probability) × Stake)

Suppose you stake $100 on YES priced at $0.40, and you assess the true probability at 55%:

• Payout if YES: $150 (you get $250 total, having risked $100)
• Payout if NO: -$100
• EV = (0.55 × $150) - (0.45 × $100) = $82.50 - $45 = +$37.50 expected value

How to Use This in Practice

1. Before placing any trade, commit your probability assessment to paper FIRST
2. Determine the break-even probability (this equals the market price)
3. If your assessment exceeds break-even by more than the bid-ask spread: strong opportunity
4. If your assessment falls below break-even: look at NO shares as an alternative
5. If your assessment matches break-even: pass — there's no meaningful edge

Position Size Calculator

Using half-Kelly: f = 0.5 × (bp - q) / b

• For a scenario where your p = 0.65, market = 0.40: b = 1.5, q = 0.35
• Full Kelly: (1.5 × 0.65 - 0.35) / 1.5 = 0.42 (42% of bankroll)
• Half Kelly: 21% of bankroll — still apply the 5% per-position ceiling

FAQ

Is there an automated calculator for prediction market trades?

PolyGram displays your anticipated entry price, quantity of shares, and maximum return directly in the order confirmation screen before you commit. Running your own EV maths beforehand remains essential for sound decision-making.

How do spreads affect the return calculation?

Modify your effective purchase price by incorporating half the spread width. If YES trades with bid=0.38 and ask=0.42, your realistic entry sits around 0.42 rather than 0.40.