YES and NO Shares in Prediction Markets: What They Mean and How to Trade Them

All binary prediction markets feature precisely two possible outcomes, each represented by YES and NO shares. Grasping how these instruments are valued and what returns look like forms the cornerstone of effective prediction market trading.

Basic Mechanics

• YES share: Delivers $1 upon event occurrence. Valued according to the market's current probability assessment.
• NO share: Delivers $1 if the event fails to occur. Priced at one minus the YES valuation.
• YES price + NO price = $1: The pair consistently totals $1 (with minor variance for bid-ask spreads)

Consider this scenario: "Will inflation surpass 3% during Q3 2026?" Should YES trade at $0.40, the market suggests a 40% likelihood of inflation exceeding 3%. NO consequently trades near $0.60 (reflecting a 60% probability it remains lower).

How to Read Probability from Price

A YES share's price directly reflects the market's probability assessment:

• YES at $0.90 = 90% likelihood the event materialises
• YES at $0.50 = 50% likelihood (even odds)
• YES at $0.10 = 10% likelihood (unlikely prospect)
• YES at $0.01 = 1% likelihood (improbable yet conceivable)

Calculating Your Returns

Each share yields a maximum settlement value of $1, irrespective of your entry price:

• Purchase 100 YES shares at $0.30 → outlay $30 → should YES resolve true: collect $100 (gain: $70, yield: 233%)
• Purchase 100 NO shares at $0.70 → outlay $70 → should NO resolve true: collect $100 (gain: $30, yield: 43%)

Underdog YES bets deliver outsized upside but lower win probability. Favoured NO positions provide modest gains paired with higher success odds.

Selling Before Resolution

Holding until final settlement isn't mandatory. Should market sentiment shift favourably, you may exit early and realise profits:

• Acquired YES at $0.30, price climbs to $0.55 → liquidate immediately at $0.55 per share and pocket gains without awaiting conclusion
• Trade moving against you? Reduce exposure by exiting at the prevailing market rate

Multi-Outcome Markets

Markets encompassing three or more possibilities (such as "Which candidate will win the 2028 presidential election?") assign a separate YES/NO pair to each option. You may back YES on any contender — victory by your selection yields $1 per share held.

FAQ

What happens to shares when a market resolves?

Successful shares instantly receive $1 USDC apiece. Unsuccessful shares expire worthless. The process occurs mechanically — no manual intervention needed.

Can I hold both YES and NO shares in the same market?

Absolutely — termed a hedge strategy. Participants frequently maintain both positions to dampen volatility or capitalise on arbitrage mismatches.

What is the minimum share purchase?

PolyGram permits purchases starting at just $1 in value at the prevailing rate. No floor exists on the number of shares required.