How does Polymarket work?

A price is not a promise

A Yes contract trading at $0.62 can be read as a rough 62% market estimate, not an official forecast or guarantee. It changes with orders, liquidity, and new information.

Check the best bid, best ask, and the gap between them. A market order can execute across several price levels, making the real cost worse than the first displayed price.

Buying, selling, and exiting

You may hold until resolution or sell earlier if liquidity is available. A limit order gives more price control but may never fill. Do not assume an instant exit at the price you expect.

• Set the maximum amount you can lose.
• Read the market question and resolution source literally.
• Check depth and spread before placing an order.

Resolution and disputes

Each market defines its rules and resolution source. A proposal or dispute period may occur before final settlement. Your risk is not only predicting the event; wording, evidence sources, and dispute procedures matter too.

Displayed probability versus execution price

Polymarket normally displays the midpoint between the best bid and best ask as the market probability. If the spread is wider than $0.10, it displays the last traded price instead. The displayed percentage is therefore a reference value, not a guaranteed quote.

If the best bid is $0.34 and the best ask is $0.40, the displayed probability is 37%. A buyer would currently pay $0.40 while a seller would receive $0.34. A larger order can fill at several levels and produce a worse average price.

• Inspect the best bid and ask instead of relying on the large percentage alone.
• Compare your order size with the quantity available at each level.
• Use a limit order when price control matters more than immediate execution.

From position to settlement

A binary market has Yes and No outcome tokens. Every complete Yes/No pair is backed by $1 of pUSD collateral. After resolution, each winning token can be redeemed for $1 and the losing token is worth $0.

For example, buying 100 Yes tokens at $0.40 costs $40 before fees. A Yes resolution produces a gross $100 redemption; a No resolution produces $0. Selling early is possible only at prices and quantities available in the order book.