WHAT ARE PREDICTION MARKETS?
Sportsgrid-Staff
Prediction markets are regulated financial markets where participants trade on the outcome of future events. Instead of betting odds, prediction markets use Yes/No contracts that reflect the probability an event will occur.
If a contract settles at “Yes,” it pays $1.00.
If it settles at “No,” it pays $0.00.
How Prediction Markets Work
Prediction markets operate the same way financial markets do:
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People buy contracts when they believe the event is more likely than the current price suggests.
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People sell contracts when they believe the event is less likely than the current price suggests.
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Prices move according to supply, demand, and new information.
There is no bookmaker, no house line, and no odds-setter.
The market sets its own probability.
Prediction Markets Are Not Sportsbooks
Sportsbooks set odds.
Prediction markets discover odds via trading.
Why Prediction Markets Matter
Prediction markets are powerful because they:
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React instantly to news
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Incorporate public sentiment
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Capture real probabilities
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Reward accurate predictions through profit
SportsGrid’s Role
The SportsGrid Prediction Market 101 series is designed to help newcomers understand the mechanics, strategy, and mindset behind prediction markets.
Continue Learning
Return to Prediction Market 101
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Related Reading: Beginner Trading Strategies for Kalshi
