How it works?

When you open a market, you will see a question about a future event (for example: “Will <X> happen by <date>?”) with two possible outcomes: Yes or No (in some cases, markets may have multiple choice outcomes). Here’s how it works:

• Outcome Shares: For each outcome (Yes or No), there are shares that you can buy or sell. The price of a share ranges from $0.01 to $0.99 and indicates the implied probability of that outcome being correct. For instance, if “Yes” shares are trading at $0.65, the market believes there’s roughly a 65% chance that the event will indeed happen. Conversely, a “No” share price of $0.35 would imply a 35% chance of the event not happening (since in a Yes/No market, if Yes is 65% likely, No is 35% likely, totaling ~100%). Prices move as users trade; buying an outcome drives its price up, while selling drives it down.

• Settlements and Payouts: Each share will resolve to $1 or $0 once the outcome is decided. If you hold shares in the correct outcome, you can redeem each for $1. If you hold shares in the wrong outcome, they expire worthless. For example, say you bought “Yes” shares at $0.65 each. If the event resolves to “Yes,” each of those shares pays out $1, earning you a profit of $0.35 per share. On the other hand, if the event resolves “No,” your “Yes” shares become $0.00, and you lose what you paid for them.

• Trading for Profits: You don’t have to wait until final settlement to realize gains or losses. You can trade shares at any time before the market’s resolution. If your view changes or you hit a target profit, you might sell your shares early. For instance, you could buy shares at 20¢ and later sell them at 70¢ if new information moves the odds in your favor, locking in profit before the event concludes.

• Market Resolution: Each market has clear rules and resolution criteria. The question will specify what exactly needs to happen for “Yes” to be the winning outcome (and by what date/time). Probable relies on UMA oracle to determine outcome for a market.