Explainers

Deep explainers on how prediction markets work, from market mechanics to resolution.

Updated

Sources

Every figure on this page is checked against primary sources — regulator filings, exchange documentation and official results. Prices and rules change; verify with the operator before trading.

  1. Customer advisories and investor protection notices — U.S. Commodity Futures Trading Commission
  2. Designated Contract Markets (DCMs) — U.S. Commodity Futures Trading Commission
  3. The Commodity Exchange Act & regulations — U.S. Commodity Futures Trading Commission

Frequently asked questions

Who sets the odds on a prediction market?

No one. Prices come from traders posting bids and offers in an order book, unlike a sportsbook where the house sets the line and takes the other side.

What is the spread and why does it matter?

The gap between the best bid and best offer. A wide spread raises your cost to enter and exit, which matters more than the headline fee on thin markets.

How does resolution work?

Each contract names a settlement source and wording in its rulebook. The exchange settles against that source, which is why edge cases are decided by the rules, not intuition.