YES and NO Shares in Prediction Markets: What They Mean and How to Trade Them

Every binary prediction market contains precisely two possible outcomes, each represented by YES and NO shares. Grasping how these shares are valued and what settlement looks like is essential for anyone trading on prediction platforms.

Basic Mechanics

• YES share: Settles to $1 when the event materialises. Its current market price reflects the implied likelihood.
• NO share: Settles to $1 when the event does not materialise. Its price is always 1 minus the YES price.
• YES price + NO price = $1: These two always total $1 (with minor variance for bid-ask spreads)

Consider this scenario: "Will inflation exceed 3% in Q3 2026?" Suppose YES trades at $0.40, suggesting the market assigns a 40% likelihood to inflation surpassing 3%. Conversely, NO would trade around $0.60, reflecting an 60% chance it remains below that threshold.

How to Read Probability from Price

A YES share's price directly translates to the market's probability assessment:

• YES at $0.90 = 90% likelihood the event transpires
• YES at $0.50 = 50% likelihood (even odds)
• YES at $0.10 = 10% likelihood (unlikely scenario)
• YES at $0.01 = 1% likelihood (improbable yet feasible)

Calculating Your Returns

Each share you hold delivers a maximum payout of $1 upon settlement, irrespective of your purchase price:

• Acquire 100 YES shares at $0.30 → total outlay $30 → should YES prevail: collect $100 (gain: $70, yield: 233%)
• Acquire 100 NO shares at $0.70 → total outlay $70 → should NO prevail: collect $100 (gain: $30, yield: 43%)

Underdog YES positions deliver outsized upside but face steeper odds. Favoured NO positions yield modest gains paired with stronger winning chances.

Selling Before Resolution

Markets need not be held through final settlement. Should prices move favourably, you may exit early and realise your gains:

• Purchased YES at $0.30, price climbs to $0.55 → liquidate immediately at $0.55 per share and pocket profits without awaiting conclusion
• Trade moving against your thesis? Reduce exposure by selling at prevailing market rates

Multi-Outcome Markets

Markets encompassing three or more outcomes (such as "Who will win the presidency in 2028?") feature separate YES/NO pairs for each option. You may back any candidate through their YES shares — victory means your holdings convert to $1 each.

FAQ

What happens to shares when a market resolves?

Successful shares instantly convert to $1 USDC per unit. Unsuccessful shares forfeit all value. The process executes automatically on-chain — no manual intervention needed.

Can I hold both YES and NO shares in the same market?

Absolutely — termed a hedged position. Traders frequently employ this tactic to dampen volatility or capitalise on pricing inefficiencies through arbitrage.

What is the minimum share purchase?

PolyGram permits purchases starting from $1 in notional value at the current quote. No floor exists on the quantity of shares you must acquire.