How to Read
Prediction Market Odds
Prediction market prices are simpler than traditional betting odds: and more informative. A YES contract priced at $0.70 means exactly one thing: the market implies a 70% probability. This guide explains how to read prices, calculate your potential profit, find your break-even probability, and spot mispriced contracts.
Price = probability. That's it.
The market price of a YES contract is the market's estimate of the probability the event occurs. Always. No conversion needed.
On Kalshi and Polymarket, every contract resolves to either $1.00 (YES wins) or $0.00 (NO wins). The current market price reflects what traders collectively believe the probability is, expressed as a dollar amount between $0.01 and $0.99.
- Event happens (resolves YES): receive $1.00 → +$0.30 profit
- Event doesn't happen (resolves NO): receive $0.00 → −$0.70 loss
- Market implied probability: 70%
- Event doesn't happen (resolves NO): receive $1.00 → +$0.70 profit
- Event happens (resolves YES): receive $0.00 → −$0.30 loss
- Market implied probability of NO: 30%
How to calculate your profit and ROI
Worked examples across different price points
| YES price | Implied prob | Profit if YES | Loss if NO | ROI if correct |
|---|---|---|---|---|
| $0.10 | 10% | $0.90 | $0.10 | 900% |
| $0.25 | 25% | $0.75 | $0.25 | 300% |
| $0.50 | 50% | $0.50 | $0.50 | 100% |
| $0.70 | 70% | $0.30 | $0.70 | 43% |
| $0.85 | 85% | $0.15 | $0.85 | 18% |
| $0.95 | 95% | $0.05 | $0.95 | 5% |
Break-even probability and finding mispriced contracts
The key question when evaluating any trade: is the market's implied probability right? If you believe the true probability is higher than the market price, buy YES. If you believe it's lower, buy NO. Your break-even probability is the market price itself.
Your probability estimate > market price. The market is pricing the event as less likely than you believe. Expected value is positive at your estimated probability.
Your probability estimate < market price. The market is overpricing the event. Buy NO to profit from the overestimate. NO price = 1 − YES price.
Important: Your edge is only real if your probability estimate is actually better than the market's. Prediction markets aggregate the knowledge of many traders: the market price is usually a high-quality estimate. To beat it, you need specific information or analysis that isn't yet reflected in prices.
Prediction market prices vs sportsbook odds
If you're coming from sports betting, prediction market pricing is simpler: no conversion from +/− American odds or fractional odds needed.
| Format | Example | What it means | Implied probability |
|---|---|---|---|
| Prediction market (Kalshi) | $0.70 YES | Pay $0.70, win $1.00 if YES | 70% |
| American odds (+) | +143 | Bet $100, win $143 profit | 41% |
| American odds (−) | −233 | Bet $233 to win $100 profit | 70% |
| Decimal odds | 1.43 | Bet $1, get $1.43 total back | 70% |
| Fractional odds | 3/7 | Win $3 for every $7 wagered | 70% |
A key difference: sportsbooks build a margin ("vig") into odds so YES + NO implied probabilities sum to > 100%. On Kalshi, YES price + NO price = $1.00 exactly: there's no built-in house edge in the price itself (the platform revenue comes from the separate profit fee).
Common questions
What does the price mean on Kalshi or Polymarket?+
The YES price directly equals the market's implied probability. $0.65 YES = 65% implied probability that the event occurs. If it resolves YES, you receive $1.00 per contract. If NO, you receive $0.00. Simple.
How do I calculate profit on a prediction market?+
YES: profit = $1.00 − price paid (e.g., buy at $0.60, profit $0.40). NO: profit = YES price (e.g., YES at $0.60 means NO at $0.40, profit $0.60 if NO). Multiply by number of contracts for total P&L.
What is implied probability?+
The probability the current market price implies. It equals the YES price directly. A $0.72 YES contract implies 72% probability. Compare to your own estimate to find edge: if you believe 80% and market says 72%, buy YES (positive expected value at your estimate).
What's break-even probability?+
The probability at which a trade has zero expected value. It equals the contract price: buying YES at $0.60 has EV = 0 if the true probability is exactly 60%. You need to believe the probability exceeds 60% (for YES) or is below 60% (for NO) to have positive EV.
Why don't prediction market prices sum to 100% + house edge like sportsbooks?+
Kalshi's YES and NO prices sum to exactly $1.00: no built-in vig in the price. The platform earns its revenue separately (profit fee on winning trades). This means prediction market prices are cleaner probability estimates than sportsbook lines, which have house margin baked in.
Next steps
Strategy & bet sizing
Kelly Criterion, finding edge, common mistakes, and how to think about probability like a professional.
ReferencePrediction market glossary
Every term you'll encounter: implied probability, taker fee, CFTC DCM, resolution criteria, and more.
GuideHow to trade on Kalshi
Ready to place your first trade? Step-by-step guide to account setup, deposits, and placing orders.