Prediction market glossary.

Election forecast model from FiveThirtyEight (now ABC News). Combines polling, economic fundamentals, and demographic data. Daily updates during peak cycle. Heavily watched by political traders.

A single number summarizing total tropical activity in a season. Calculated from the wind speeds of every named storm. Polymarket runs ACE-bracket contracts as season totals, a more stable measure than named-storm count.

The Associated Press's election-call team. Resolves nearly every Kalshi major-race contract. AP calls a race when it judges that the trailing candidate cannot mathematically catch up. Network and Decision Desk HQ calls vary; the contract names AP specifically.

The Associated Press's sports wire. Posts game results within minutes of final whistle. Cited by Kalshi as a backup resolution source when the league site lags.

When the same event trades at different prices on different platforms, you can buy low on one and sell high on the other for risk-free profit. True arbitrage opportunities are rare and brief in efficient markets, but prediction markets still have inefficiencies, especially between regulated and unregulated platforms.

The interval between an award being voted (by media, academy, or league panel) and being publicly announced. MVP, Coach of the Year, Oscars Best Picture, all have a 24-72 hour vote-to-announce window where contract price moves on rumor.

BEA's first GDP estimate, published roughly one month after quarter-end. Two more revisions follow (second, third). Most economy and finance contracts resolve on the advance estimate, not the revised numbers.

The fundamental instrument in prediction markets. You buy a contract at a price between $0 and $1. If the event happens, Yes contracts pay $1. If it doesn't, No contracts pay $1. The price reflects the market's implied probability of the event occurring.

BLS publishes CPI and NFP data on a regular schedule. The first release is binding for prediction-market resolution, even though BLS revises numbers in subsequent releases. The 2024 NFP benchmark revision (a 818k downward revision) is the textbook example of why this rule matters.

On multi-round tournaments (NCAA, World Cup), each round is a child market within a parent bracket event. Traders mix-and-match positions across the bracket to express a thesis.

You don't have to hold a contract until settlement. If you bought at 40¢ and the price moved to 70¢, you can sell on the order book and take 30¢ profit per contract immediately. Cashing out removes settlement risk but may involve slippage on exit.

Caucuses (Iowa, Nevada D) involve in-person delegate selection over hours; primaries are direct ballot votes. Caucus turnout is lower and less representative; primary results are more predictive of a nomination.

A CLOB displays all buy and sell orders in one place, matched by price-time priority. Most prediction market platforms (Kalshi, Polymarket) use this model. It provides price transparency and fair execution but requires sufficient liquidity to function well.

The CFTC is the primary US regulator overseeing prediction market platforms. CFTC-regulated platforms like Kalshi offer regulatory protection but may have market type restrictions. Platforms operating outside CFTC jurisdiction (like Polymarket) offer more markets but less regulatory protection.

The NWS Daily Climate Report. Posted daily for every major station. Records the day's high, low, precipitation, and snowfall. Resolves nearly every Kalshi daily-temperature contract.

The difference between the price you filled at and the price the market closed at. Positive CLV is the standard sportsbook proxy for skill. Prediction-market traders use the same concept across longer windows: opening price vs. resolution price.

The closing price is the last price at which a contract trades before the market closes for resolution. Markets that close at 95¢ or higher suggest near-certainty. Watching closing price trends across similar markets can inform your trading strategy.

The trophy awarded to the World Series winner. Kalshi World Series contracts resolve at the moment the trophy is presented at the end of the clinching game. The contract closes within minutes of the on-field ceremony.

Conditional markets depend on another event happening first. For example, 'Will X win the general election?' might only activate if X wins their party's nomination. Pricing conditional markets requires evaluating chained probabilities.

Contract prices range from $0.01 to $0.99 (or 1¢ to 99¢). A contract trading at 65¢ implies the market believes there's a 65% chance the event will happen. Prices constantly move as new information and new trades arrive.

Partisan Voting Index. A district's lean relative to the national average. R+5 means the district voted 5 points more Republican than the country in the last two presidential cycles. Used to translate generic-ballot signals into district-level price.

Correlated markets move together because their underlying events are related. If 'Party X wins the election' and 'Policy Y is enacted' are both active markets, a shift in one often drives price changes in the other. Identifying correlations can reveal mispriced contracts.

Colorado State University's Tropical Meteorology Project. Issues seasonal hurricane forecasts in April, June, July, August. Most-watched non-government number.

Cook Political Report's House editor. Known for live-tweeting election-night calls before AP and for early identification of bellwether districts. Arguably the single most-cited individual race rater.

Decentralized exchanges (DEXs) like Polymarket operate through smart contracts rather than a central authority. Benefits include censorship resistance and global access. Tradeoffs include crypto-only funding, smart contract risk, and less regulatory protection.

Order book depth shows how many contracts are available at each price point. Deep books absorb large trades without significant price impact. Shallow books mean even modest trades can move the price. Always check depth before placing large orders.

Kalshi resolves daily highs using local standard time year-round. During DST, that means the contract day runs 1 AM through 12:59 AM the following day, not midnight to midnight. Affects late-day fills.

European Broadcasting Union's rules for Eurovision country eligibility. Decisions are sometimes published within hours of the contest, creating tight resolution windows on related contracts.

The term used by CFTC-regulated platforms for prediction market contracts. Event contracts are legally classified as derivatives tied to observable events. This regulatory classification is what allows platforms like Kalshi and Robinhood to offer prediction markets in the US.

Expected value (EV) calculates whether a trade is profitable long-term. If you buy a contract at 40¢ and believe the true probability is 55%, your EV is positive. Consistent positive-EV trading is the foundation of profitable prediction market participation.

Expiration dates define when a market closes for trading and the outcome is determined. Markets expiring soon with prices away from 0 or 100 represent the highest-conviction opportunities — or the biggest risks.

Quarterly campaign-finance report due April 15. Reveals fundraising margins, donor base, burn rate. Race-raters use FEC data to re-rate competitive seats. Q1 is the first read on candidate viability for the cycle.

CME futures on the Fed Funds rate. The cleanest cross-platform reference for prediction-market Fed-decision contracts. Implied probability from Fed Funds futures is the standard Bloomberg / WSJ benchmark.

Some platforms reward traders who add liquidity by reducing or rebating their trading fees. Makers (those who place limit orders that add to the book) often pay lower fees than takers (those who fill existing orders). Volume-based rebate tiers are common.

If you place a limit order for 100 contracts and only 60 execute, your fill rate is 60%. Low fill rates are common in illiquid markets or when your limit price is far from the current market. Monitoring fill rates helps you calibrate your order strategy.

Economy and finance contracts resolve on the first official release of a number, not the final revised value. CPI prints, NFP totals, and GDP estimates all get revised after release; contracts pay on the first print regardless.

The Summary of Economic Projections published quarterly with FOMC meetings. Each member's anonymous dot reflects their forecast of the year-end Fed Funds rate. Median dot moves Fed-rate-path contracts.

Gas fees are paid to blockchain validators for processing transactions. On Polygon (where Polymarket operates), gas fees are typically very low (fractions of a cent). On Ethereum mainnet, gas fees can be significant. Gas fees apply to deposits, withdrawals, and sometimes trades.

Polls ask: "If the election were held today, would you vote Democratic or Republican for Congress?" Aggregated by RealClearPolitics, 538, others. Translates to a district-level forecast via swing assumptions.

NASA Goddard's Land-Ocean Temperature Index. The unsmoothed annual value resolves the KXGTEMP-26 and Polymarket hottest-year contracts.

On Polymarket multi-option markets (e.g. Eurovision winner, World Cup winner), each binary child has a groupItemTitle naming the specific option (country, team, candidate). Used by traders to navigate between binaries within a single event.

Hedging involves taking a position that offsets potential losses from another position. In prediction markets, you might buy No contracts on one platform to hedge a Yes position on another if you want to lock in profit or limit downside.

A contract trading at $0.72 implies a 72% probability that the event occurs. Implied probability is the most intuitive way to read prediction markets. When you think the true probability differs from the implied probability, you've found a potential edge.

Annual Federal Reserve Bank of Kansas City symposium in late August. Chair speech traditionally signals the autumn rate path. Historically the highest single-day Fed Funds futures move of the year.

The Kelly Criterion recommends committing a fraction of your capital proportional to your edge. The formula is: (bp - q) / b, where b is the net payout multiple, p is your estimated probability, and q is 1-p. Most practitioners use 'fractional Kelly' (25-50% of the recommended amount) for safety.

KYC processes require you to verify your identity (typically government ID and proof of address) before trading. All CFTC-regulated platforms require KYC. Crypto-native platforms may have lighter or no KYC requirements, depending on jurisdiction.

The Paris-Le Bourget weather station. Polymarket migrated Paris temperature contracts here from CDG on April 19, 2026 after the hair-dryer manipulation incident.

A limit order lets you set the exact price you want to buy or sell at. Your order sits on the book until someone matches it. This gives you price control but no guarantee of execution, especially in thin markets.

High liquidity means thick order books, tight spreads, and minimal slippage. Low liquidity means you may struggle to enter or exit positions at fair prices. Liquidity varies dramatically across platforms and individual markets. It's one of the most important factors in platform selection.

On decentralized platforms, liquidity pools replace traditional order books. Users deposit funds into pools that facilitate trades algorithmically. Pool-based platforms may offer different pricing dynamics than order-book-based platforms.

Makers place limit orders that add new price levels to the order book. Because they add liquidity, makers often receive lower fees or rebates. Being a maker requires patience — your orders sit until someone fills them.

Market makers continuously quote both bid and ask prices on a contract, profiting from the spread between them. They add liquidity to the market, making it easier for others to trade. Some platforms offer fee rebates to incentivize market making.

A market order fills instantly at whatever price is currently available on the book. You get speed but give up price control. In low-liquidity markets, market orders can experience significant slippage.

The Managed Optimistic Oracle V2 proposer whitelist UMA introduced in August 2025. Restricts resolution proposals on Polymarket sports / entertainment contracts to vetted UMA participants.

Unlike binary (Yes/No) markets, multi-outcome markets offer several options. For example, 'Who will win the election?' might list 5+ candidates, each with their own contract price. The prices across all outcomes should theoretically sum to $1.

The official US recession arbiter. NBER's Business Cycle Dating Committee declares recession start and end dates, typically with a 6-12 month lag. Recession contracts that close before NBER calls resolve NO regardless of underlying conditions.

BLS's annual revision of the 12-month total of nonfarm payroll growth. Published in late August. The August 2024 revision (−818k) was the largest non-recession revision in modern history.

The official tropical cyclone advisory issued every 6 hours during an active storm. The initial advisory is binding for Polymarket landfall and Cat-level contracts, even if later reanalysis revises the storm.

PredictIt operates under a CFTC no-action letter rather than full regulation. This means the CFTC has chosen not to take enforcement action against the platform, but it doesn't carry the same regulatory protections as full CFTC approval. The distinction matters for user protections.

NOAA Climate Prediction Center seasonal hurricane outlook. Issued in May with mid-season revision in August. Headline pre-season number.

The web portal NWS uses to publish monthly climate summaries. Resolves Kalshi monthly snowfall, monthly temperature, and monthly rainfall contracts. First business day of the month following the contract window.

National Snow and Ice Data Center. Resolves Polymarket Arctic sea ice contracts. Announces annual minimum in mid-September with full analysis in early October.

On-ramps let you buy crypto (like USDC) using bank transfers, credit cards, or other traditional payment methods. Platforms like Polymarket often integrate on-ramp services so you can fund your account directly without using a separate crypto exchange.

OPEC+ ministerial meeting output decisions. Published days before scheduled meetings. Sets near-term oil-supply expectations and moves crude oil contracts within minutes of release.

Open interest represents the total number of active contracts in a market. Rising open interest with rising prices suggests genuine conviction. Rising prices with falling open interest may indicate a short-term move without staying power. It's a key signal for market analysis.

A district where the incumbent is not running for re-election. Open seats flip parties more often than incumbent-held seats. Heavily traded on race-by-race contracts.

An order book shows all open buy (bid) and sell (ask) orders for a contract, organized by price. Thicker order books mean more liquidity and tighter spreads. On platforms like Polymarket, you can see the full order book before placing a trade.

Order matching is the exchange mechanism that connects buyers with sellers. When a buy order price meets or exceeds a sell order price, the trade executes. Different platforms use different matching algorithms, but most prediction markets use price-time priority.

If Yes trades at 55¢ and No trades at 48¢, they sum to $1.03. That 3¢ overround represents the market's built-in cost. Lower overround means more efficient pricing. Prediction markets typically have lower overround than traditional sportsbooks.

Paper trading lets you test strategies without financial risk. While no major prediction market platform currently offers built-in paper trading, you can track hypothetical positions manually. It's especially useful for developing your evaluation framework before committing real capital.

Winning contracts typically pay $1 (or 100¢). Your profit is the payout minus your purchase price and any fees. If you bought Yes at 35¢ and the event occurs, your gross profit is 65¢ per contract (a 186% return on your 35¢ investment).

Professional baseball / basketball writers associations. Vote awards (MVP, Cy Young, Rookie of the Year) on a calendar published months in advance. Resolution dates on award contracts align with these calendars.

A position represents your active holding in a prediction market contract. A 'Yes' position profits if the event occurs, a 'No' position profits if it doesn't. You can exit a position before settlement by selling it on the order book.

Position sizing determines what percentage of your capital goes into each trade. Conservative approaches risk 1-3% per position. Aggressive traders might go to 5-10%. The Kelly Criterion provides a mathematical framework for optimal position sizing based on your estimated edge.

Price impact measures how much the contract price shifts as a result of your trade. Larger orders in less liquid markets create bigger price impact. Sophisticated traders split large orders to minimize this effect.

For treaty contracts (Greenland, NAFTA-style deals), the period between negotiation and Senate ratification. Two-thirds Senate vote required. Resolution language usually requires both signature and ratification.

Polling aggregator. Publishes the RCP Average for generic ballot, presidential approval, and major races. Less methodologically transparent than 538 but more frequently cited.

The post-election period during which an automatic or requested recount can occur. Most states trigger automatic recounts within 0.5 to 1.0 percentage points. Kalshi closes most Senate / House contracts on Feb 1 to allow recount completion.

When traders disagree with how a contract resolved, some platforms have formal dispute processes. Polymarket uses an optimistic oracle system where outcomes can be challenged. Understanding dispute mechanisms is important for contracts with ambiguous outcomes.

Every contract specifies its resolution source — the authority that determines whether the event occurred. This could be a government report, an official sports score, a specific news outlet, or an on-chain oracle. Understanding the resolution source is critical to evaluating edge cases.

When a contract's resolution language admits more than one interpretation. Common in award contracts ('best' is whose vote?), eligibility contracts ('qualified' under whose rules?), and timing contracts ('before X date' in whose timezone?). The structural risk of sports / entertainment markets.

University of Virginia Center for Politics' race-rating publication. Updates Senate, House, and Governor ratings throughout the cycle. Often paired with Cook in race-rating consensus.

The 1 to 5 scale for hurricane intensity. Cat 3 = 111 mph sustained winds, Cat 5 = 157 mph. Most contracts resolve on the wind speed at landfall, not at peak intensity.

Triggered when the 3-month moving average of unemployment rises 0.5 percentage points above its 12-month low. Has historically signalled recession start in real time. Triggered briefly in 2024, partially undone by subsequent revisions.

The implied probability a team wins a best-of-seven series, derived from per-game odds. Sportsbook traders translate prediction-market price into series odds and vice versa. The bridge is sometimes called the 'series-line decompose.'

Settlement is the final stage of a prediction market contract's lifecycle. The event either happened (Yes pays $1) or didn't (No pays $1). Settlement timing varies — some contracts settle within minutes of the event, others may take days if the outcome is disputed.

Some platforms charge a fee when your winning contracts settle. This is separate from trading fees and can significantly impact profitability on contracts bought close to settlement price. Always check whether your platform charges settlement fees.

Sportsbook moneyline odds. Translates between probability and price via the standard moneyline → implied probability formula. Used as the cross-platform reference for sports prediction-market price.

Slippage occurs when your trade executes at a different price than expected, usually because the order book moved or lacked sufficient depth at your target price. Larger trades in thinner markets experience more slippage.

Smart money refers to traders with large positions and strong track records. Tracking smart money movements — large buys, unusual volume spikes, wallet analysis on crypto platforms — can reveal what informed participants believe about an event's probability.

Storm Prediction Center's monthly tornado tally. Publishes preliminary numbers each month, finalised the following month. Resolves US tornado-count contracts.

An off-cycle election to fill a seat between regular elections. Special-election margins historically over-perform the next-cycle generic ballot by 3-5 points. Large out-party over-performance is read as a leading midterm indicator.

Daily net flows into spot Bitcoin ETFs (IBIT, FBTC, etc.). Published by individual issuers and aggregated by trackers. Strongest single short-window driver of BTC price markets.

The spread is the gap between the highest bid (buy) and lowest ask (sell) on the order book. A contract with a best bid of 62¢ and best ask of 65¢ has a 3¢ spread. Tighter spreads mean lower trading costs. The spread is effectively a hidden fee.

When USDC, USDT, or another stablecoin trades meaningfully below $1. Polymarket runs depeg-risk markets that resolve on hourly closes through a window. The March 2023 USDC depeg is the modern reference.

Identifying which weather station resolves a given contract. KNYC vs JFK vs LGA all record different temperatures on the same day. The cohort phrase: "all of this is public and it is on you to find it."

Takers use market orders or aggressive limit orders that fill existing book orders. Takers get immediate execution but usually pay higher fees than makers. Most casual traders are takers.

Most prediction markets use 1¢ (or $0.01) tick sizes, meaning prices move in one-cent increments. This standardization simplifies order placement and price comparison. Some platforms may use different tick sizes for certain market types.

Polymarket's 2025 multi-year partnership with TKO (UFC and Zuffa Boxing). Combat-sports contracts now route through Polymarket as the official prediction-market partner; settlement language aligns with TKO official records.

Trading fees vary significantly across platforms. Kalshi charges up to 2¢ per contract. Polymarket charges tiered taker fees by market category: geopolitics is free, sports peak at 0.75%, and crypto markets peak at 1.80%. FanDuel charges per-contract fees on payout. Always factor trading fees into your expected value calculations.

On Polymarket, a UMA tokenholder who files a proposed outcome on a settled contract. After filing, a 24-hour dispute window allows challenges with a $750 bond. Disputes are rare overall; frequency varies by category (political contracts have more disputes than weather; economy and finance sits between).

USDC (USD Coin) is the primary trading currency on Polymarket and other crypto-native prediction platforms. It maintains a 1:1 peg with the US dollar. To trade on these platforms, you need to acquire USDC through a crypto exchange or on-ramp service.

Borrowed from sports betting terminology, the vig (or juice) is the cost embedded in prediction market pricing. It's expressed through the overround — when contract prices for all outcomes sum to more than $1. Lower vig means more efficient markets and better value for traders.

Volume measures market activity and interest. High volume generally means better liquidity and more efficient pricing. Sudden volume spikes can signal new information entering the market. Daily volume is one of the most useful filters when scanning for trading opportunities.

Whales are high-capital traders whose activity can significantly move markets. On crypto-native platforms, whale wallets are publicly trackable. A whale entering or exiting a position often triggers cascading price movements as other traders react.

A UMA tokenholder pre-approved to file resolution outcomes on Polymarket markets. Introduced with MOOV2 in August 2025 to reduce dispute volume on semantic-resolution markets. Sports contracts increasingly resolve through whitelisted proposers.

Withdrawal fees vary by platform and method. Crypto-native platforms like Polymarket charge blockchain gas fees. Traditional platforms like Kalshi may charge for wire transfers but offer free ACH. Always factor withdrawal fees into your total cost of trading.

When the 10-year Treasury yield is below the 2-year. Historically a recession leading indicator with 12-24 months of lag. The 2022-2024 inversion was the longest in modern history without a recession.