1
Price = implied probability
On Polymarket or Kalshi a contract pays $1 if the event happens. Paying 40¢ means the market thinks there is about a 40% chance. Sportsbook American odds convert the same way: -150 ≈ 60%, +150 ≈ 40%.
2
The vig (hold)
Sportsbooks build in a margin, so both sides add up to more than 100%. Comparing books helps you find the least expensive price.
3
Using event contracts to hedge
An event contract can offset a stock risk — for example, a contract that pays if inflation comes in hot can cushion a portfolio that would drop on a hot CPI print.
Common mistakes
- Treating a favorite as a sure thing.
- Ignoring fees and the vig.
- Betting money you cannot afford to lose.