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Trading floor · 6/8Event Contracts
Desk · price the event P&L 0 · calibration 0/0
20%
Order tape
Your quote on a 0–100¢ scale
Briefing · Trading floor

Event Contracts

Skill: Bayesian updating, quoting in probabilityPrediction-market desks

A YES contract pays 100 if the event happens and 0 if not, so its fair price in cents equals the probability. You start from a base rate, update with the news using odds × LR, then quote a two-sided market. Some traders already know the answer.

Shorthand
  • Price in cents = probability. Edge buying YES = p − ask.
  • Informed traders only hit you when you're wrong. Width must cover them.
  • Near 0% or 100%, quote tighter in cents because there is less room to be wrong.
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