Prediction markets look more complicated than they are. The interface uses words like "shares," "depth," "spread." Two minutes in, you're worried you missed a finance class somewhere.
You didn't. Here's the entire system in five minutes.
Step 1: Every Market Is a Yes/No Question
Will Liverpool win the Premier League? Will the Bank of England cut rates in May? Will it rain in London on Saturday? Each is a question with two outcomes: YES or NO.
Step 2: The Price Is the Probability
If YES is trading at 65p, the market thinks there's a 65% chance the answer turns out to be YES. NO will be trading at 35p, because the two prices always add up to £1.
Buy YES at 65p. If you're right, your share pays out £1 — a 35p profit per share. If you're wrong, the share is worth zero. That's it. That's the whole game.
The price is the implied probability. 80p = 80%. 12p = 12%. No conversions, no decimal odds, no fractional bookmaker maths.
Step 3: You Can Sell Before Resolution
Unlike a fixed-odds bet, you don't have to hold until the event happens. If you bought YES at 30p and news pushes it to 70p, you can sell — locking in a 40p profit per share without waiting for the actual outcome.
This is the part that makes prediction markets feel like a stock exchange. Prices move in real time. You can trade the move, not just the result.
Step 4: Spread and Depth (Boring But Useful)
The "spread" is the gap between the highest YES buyer and the lowest YES seller. Tight spread = lots of trading, you'll get a fair fill. Wide spread = thin market, your trade will move the price against you.
"Depth" is how much you can trade before the price moves. A market with deep liquidity can absorb large trades without flinching. A thin one can't.
Step 5: That's It
Yes/no question. Price is probability. Buy low, sell high (or hold to resolution). Watch the spread. Done.
Everything else — order types, charts, advanced strategies — is optional layer cake. The five steps above are the whole cake.