Welcome to our guide to understanding the relationship between the Commodity Futures Trading Commission (CFTC) and prediction markets. Essentially for seeing how these trading sites work and you can safely use them. We’ll give you a quick introduction to prediction markets and see how the CFTC regulates them to ensure that you get a safe way to make your trades. You’ll also get to see how the prediction markets phenomenon … What is slippage, and how does it work in relation to prediction markets? “Slippage” is the term that describes the difference between the expected price of an event contract and the actual trade execution price. Slippage in prediction markets can be both negative and positive. Negative slippage is when the order closes at a higher price than your initial purchase price. Positive slippage is when the trade executes at a … If you need some help on how to read market prices as probabilities when using prediction markets, we are happy to help. We have compiled this guide to explain how market prices work and how to interpret the outcomes. It is essential to have a solid understanding of prediction market prices; otherwise, you may make mistakes when buying and selling contracts. Get a comprehensive breakdown of prediction markets, including the … Prediction markets are currently regulated by the CFTC at the Federal level, so you can try them from any US state. We’ve put together a Kalshi vs Polymarket guide to help you compare two of the leading sites. We’ll compare their apps and look at the markets they cover. We’ve also gone through other key site features, including how straightforward they are to use, especially for beginners. You can also … Many prediction market traders struggle to understand the different event trading fees when using the various regulated trading platforms. If you are one of those traders who need help, we have compiled this guide to unpack the relevant trading costs. Generally, prediction market fees are grouped into two categories: trading fees and non-trading fees. Trading fees include the exchange fees for buying and selling contracts, as well as slippage. Non-trading … Every day, we’re surrounded by uncertainty, what the next election might bring, whether inflation will spike again, or if a major company is about to drop a bad quarter. Event betting, or better to say, trading events, gives you a way to trade on those outcomes. Instead of guessing in a group chat or scrolling past headlines, event contracts let you take a position. It’s not the same as traditional … There’s been a lot of buzz around prediction markets lately, and the Kalshi vs Robinhood debate keeps popping up. Both let you trade on real-world outcomes, but the way they do it, and who they’re best for, couldn’t be more different. In this article, we’ll take a proper look at how Kalshi and Robinhood stack up. Not just what they offer, but how they feel to use. We’ll compare their … Prediction markets are emerging as competitors to traditional betting sites in the US. If you’re new to them, it’s natural to ask what’s the difference between prediction markets vs sportsbooks. We’ll provide the answers in this guide. For starters, both prediction markets and regular sportsbooks involve backing outcomes on sports games and other events. However, the former is more like trading, while the latter involves staking on fixed odds. This …
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Prediction markets have been grabbing plenty of headlines of late. They allow you to enter contracts and trade on the potential outcome of numerous events in sports, politics, and many other scenarios, based on a yes/no outcome. You may want to know whether prediction markets are legal or not? Currently, they are legal in all 50 states, although every day brings new developments we’ll keep you apprised of. We’ll look … We’ve put together a simple guide on how prediction markets work. You can try and predict the outcome of a certain event, choosing from yes or no possibilities. Prediction market sites cover multiple markets including sports and politics. Every prediction market is based on two possibilities – you must choose either yes or no to the particular question to participate. We’ll explain how that works here and provide some examples. …
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If you are wondering what prediction markets are, you have come to the right page. We have compiled this guide to explore the ins and outs of these exchanges and see why everyone is flocking to the platforms.
If you did not know, prediction markets are exchanges where you can buy and sell contracts on various real-world events. While trading on the outcome of future events is possible, there is plenty of information to learn about the concept. Come tag along to get the lowdown, plus some tips to follow when buying and selling contracts.
Are you wondering how do prediction markets work? Firstly, these exchanges are not real money sportsbooks. Unlike online sportsbooks, where the house sets the lines and markets, when using prediction markets, all events and contracts are based on the trades of other traders on the likelihood of an event occurring. These events cover a broad range of real-world events, including sports outcomes, political election outcomes and pop culture events.
Prediction markets are a financial exchange where you can trade on the outcome of future events. All trades are in the form of binary outcomes (yes or no), and contracts range from $0 to $1. All winning contracts are paid out at $1, while losing positions are settled at $0, and you will lose your initial trading investment. Here’s an example based on which team wins the AFC West in the 2027 NFL season.
Since the value of contracts are based on the trades of other traders as a collective group, market volatility plays an important role when using prediction markets. If there is insufficient demand for your contract, you will struggle to close your position and sell your shares. Liquidity is crucial when trading on the best prediction market sites, especially if you want to close your position early and either take out your winnings or mitigate your losses.
If you have researched prediction markets, you will notice a common theme about these exchanges. There are always daily prediction market updates, and there is plenty of news surrounding the legality of these exchanges. At the time of writing this guide, in the US, prediction markets are legal if the exchange is regulated by the Commodity Futures Trading Commission (CFTC).
The CFTC is an independent US regulatory agency that oversees the commodity futures, options, derivatives and prediction markets. Once a prediction market is certified by the CFTC, the exchange is classified as a regulated Designated Contract Market (DCM).
Depending on the site that you are using, you will only be allowed to join an exchange if you are above 18 and from an available US state. Once you sign up at the best prediction markets sites, you will have to be KYC approved, so ensure you submit your proof of ID and address so that your account is verified.
As covered earlier, prediction markets are not real money online sportsbooks, and there are no fixed odds. It is crucial that you know how to read market prices as probabilities; otherwise, you will make mistakes when buying and selling contracts. Remember, prediction markets contract values are based on the traders’ assessment of the likelihood of an event occurring. These probabilities determine whether traders decide to buy or sell contracts on a specific event.
Below is an example of how to read markets prices as implied probabilities:
Before the NFL season, the Detroit Lions were trading at $0.75 to make the NFL playoffs. This does not mean that the odds on the Lions making the playoffs are $0.75 as found at online sportsbooks. Instead, the $0.75 implies that the traders believe that there is a 75% chance of the Lions reaching the playoffs.
If you believe that the Lions will qualify for the playoffs, you can buy a ‘Yes’ contract for that outcome at $0.75. If you buy a ‘Yes’ position for $100, you will receive 133.33 contracts ($100/0.75). Should the Lions reach the post-season, you will win $133.33 ($33.33 in profit). However, if the Lions have a poor regular season and do not make the playoffs, you will lose your initial investment (the $100 used to buy the ‘Yes’ contract).
When trading at prediction markets, there is always plenty of interest across a range of real-world events. Most exchanges allow traders to buy and sell contracts on several future events, including sports outcomes, politics, elections and culture. The table below details how these future events work and provides examples of the contracts you can buy and sell.
| Future event | Contract example |
|---|---|
| Sports outcomes | Buy and sell contracts on major sporting events; e.g., which NFL team will win the Super Bowl. |
| Politics/Economy | Trade positions on political and economic forecasts; e.g., the Federal Reserve’s decision for a specific period. |
| Elections | Trade outcomes of domestic and global elections; e.g., who will be the US presidential election winner. |
| Culture | Contracts on pop culture events; e.g., which actor will win an Oscar or if an artist will top the Billboard charts. |
When using prediction markets, it is crucial that you try your best to maximize your positions without being reckless. Below are some tips to follow to get the most out of your trades:
That brings us to the end of our guide, and now you should be able to answer the all-important question of what is a prediction market. Trading at these exchanges can be fun, but it is essential that you remain disciplined and stay updated with the latest real-world news, especially when buying and selling shares on highly volatile events, such as election trading. Don’t forget to factor in the trading fees for all your contracts, and remember, if there is enough liquidity for an event, it could be a good idea to close your position early to take out your profit or mitigate your losses.
If you are searching for the best prediction markets sites to join, browse the relevant banners on this page. All of these sites are regulated and available in the US, so you can click the banners to sign up and start trading.
Prediction markets are a financial exchange where you can trade on the outcome of future events, such as sports and elections outcomes. All trades are in the form of binary outcomes (yes or no), and contracts range from $0 to $1.
Yes. Prediction markets are legal in the US if the exchange is licensed by the Commodity Futures Trading Commission (CFTC).
There are several future events available for buying and selling contracts. You can trade on sports outcomes, politics, the economy, elections and even pop culture.
