How do prediction markets like Polymarket and Kalshi work?

    Short answer

    In a prediction market each contract pays $1 if an event happens and $0 if it does not, so the price works as the crowd's probability: a 62¢ "Yes" means roughly a 62% chance. Kalshi is a U.S. CFTC-regulated exchange; Polymarket is a crypto-based market with a separate U.S. offering.

    Reading the odds

    • Price in cents ≈ implied probability in percent.
    • Yes + No prices add up to about $1; the gap is the spread or fee.
    • Thin markets can move a lot on small trades, so check volume.

    Why traders watch them

    Odds update in real time as news breaks, so they can show how the crowd expects an election, rate decision or earnings outcome to play out — useful context next to stock and options data.

    Common questions

    Are prediction markets accurate?

    Liquid markets have a reasonable track record, but they can be wrong, especially on low-volume questions or surprise events.

    Is trading prediction markets legal in the U.S.?

    Kalshi is CFTC-regulated for U.S. users. Rules for other platforms vary by product and state; check before trading.

    Go deeper with Rebel Intel

    What are today's hottest prediction markets?What are the odds on the next Fed rate decision?Show me the biggest prediction-market movers today

    Related

    Educational only, not investment advice. Options involve risk and are not suitable for all investors. See how Intel is reviewed.