Overweighting an initial number (e.g., yesterday’s price) when assessing current odds.

Capturing risk-free or low-risk spreads by exploiting price differences across related markets/platforms.

Algorithmic pricing via a liquidity pool (e.g., CPMM, LMSR). Always quotes a price; larger trades move price more.

Forgetting prior frequencies leads to miscalibrated odds; start with base rates, then update with news.

Bid = highest buy; Ask = lowest sell; Spread = Ask − Bid. Narrow spreads usually indicate better liquidity.

Two possible outcomes (Yes/No). The Yes price is the implied probability of the event occurring.

Multiple mutually exclusive outcomes (A/B/C…). Outcome prices sum to ~100% as probabilities (or ~$1).

U.S. derivatives regulator overseeing certain event contracts and exchange operations.

When trading stops for a market. Often before or exactly at the event time; settlement follows after resolution.

A tradable Yes/No stake on an outcome. Typically worth $1 if correct and $0 if not.

Your on-chain account used to hold USDC/outcome tokens and sign transactions (e.g., MetaMask).

A licensed exchange category under the CFTC. Kalshi operates as a DCM for event contracts.

A time period to challenge a proposed outcome (e.g., via UMA) by staking and providing evidence.

Your advantage over market price (q − p). Positive edge compounds with disciplined sizing.

If markets are reasonably efficient, prices reflect available information and obvious edges are competed away.

Process for contesting disputed resolutions to a higher authority/mechanism in the oracle design.

In Kalshi’s schema, an Event can group one or more Markets about the same topic/time.

EV = (payout × true probability) − price. Positive EV indicates a favorable trade in the long run.

Common tendency to overbet long shots and underbet favorites, distorting probabilities.

Per-trade or settlement fees that reduce net returns; always factor them into edge/EV.

Execution of an order (fully or partially). Large orders may fill at multiple prices as they walk the book.

A governance idea: vote on values, bet on beliefs—use markets to choose policies predicted to maximize welfare.

Small blockchain network fees (e.g., MATIC on Polygon) to process transactions.

Reducing real-world risk by taking offsetting positions in related markets (like insurance).

Following recent price moves or crowd sentiment rather than independent analysis.

Prices incorporate dispersed information as traders act on their beliefs and new data.

A market resolved as invalid when criteria are ambiguous or unmet; funds are returned per platform policy.

Some markets include an explicit “Invalid” outcome token when ambiguity is possible.

A U.S. exchange for event contracts operating under derivatives regulation; USD funding and classic order book.

Educational/insight content clarifying markets, moves, and outcomes on the platform.

A bankroll sizing rule that maximizes long-run growth when you have a known edge; can be scaled (e.g., half‑Kelly).

Identity verification and anti-money-laundering checks required for regulated exchange access.

Executes at a specified price or better. Controls entry/exit and often adds liquidity.

How easily you can trade without moving the price. Driven by volume, depth, and active market makers.

Funds in an AMM used to quote prices and settle trades. Liquidity providers earn fees but take inventory risk.

Supplies funds to an AMM pool, earning a portion of trading fees while bearing inventory risk.

Smallest tradable quantity. Some platforms enforce minimum notional or share amounts per order.

A concrete, verifiable question with clear resolution criteria (e.g., “Will CPI exceed 3% in June?”).

The party that lists/defines a question and its resolution rules. Good hygiene reduces disputes.

The quantity available at each price in the order book. Deeper markets better absorb larger orders.

A participant or mechanism that continuously quotes bids/asks, reducing spreads and improving execution.

Executes immediately at the best available price. Fast but can suffer slippage in thin markets.

The prevailing bullish/bearish mood expressed via price levels and trends; can overshoot fundamentals.

Outstanding contracts not yet settled. High OI suggests more capital is committed to the market.

The live list of bids and asks. Depth shows how many shares are available at each price.

The final result that determines payouts. Binary markets resolve to Yes or No; categorical markets resolve to one option.

On-chain tokens representing Yes/No shares, redeemable for $1 if winning at resolution.

Overstating precision or odds of your thesis; counter with calibration and base rates.

The amount returned at resolution. Standard binary contracts pay $1 if correct, $0 otherwise.

A crypto-native prediction market platform with USDC settlement and on-chain trade/resolve mechanics across broad topics.

Yes (long) profits if the event occurs; No (short) profits if it does not. Manage size and risk versus conviction.

Maximum number of contracts per user per market/series, enforced for risk and compliance.

An exchange where people trade contracts linked to future events. Winning shares pay $1, losing shares pay $0. Prices approximate probabilities.

The process by which trading activity reveals the market’s best estimate of true probability.

Prices in dollars map to probabilities in percent (e.g., $0.72 ≈ 72%).

Different ways to quote price: Bid/Ask, Midpoint, Last traded, and Mark (reference for PnL).

How a market is decided and paid out. Relies on predefined sources or oracles; clear rules reduce disputes.

The stated data source used to determine the outcome (e.g., official report, election agency, oracle).

Outcome is a value in a range (e.g., unemployment 4–6%). Payouts can be thresholded or linear with the realized value.

A recurring set of Events/Markets across periods (e.g., monthly CPI), standardized for discovery.

The difference between expected and executed price, usually worse in illiquid or fast markets.

Trading to profit from mispriced odds or changing probabilities; provides liquidity and price discovery.

The minimum price increment. Affects how precisely you can place/cross orders and the spread granularity.

Short codes used to identify markets/events/series for discovery and API usage.

Order persistence policy: GTC = good-’til-cancel; IOC = immediate-or-cancel; FOK = fill-or-kill (if supported).

Low, formula-based per-contract fees; check the current schedule on Kalshi before trading.

Temporary pause in trading (by rule or system) to maintain fair and orderly markets.

A dispute-aware oracle where outcomes can be proposed and challenged; finalizes if no valid dispute.

A USD-pegged stablecoin used as trading and payout currency on Polymarket.

Aggregating diverse, incentivized views often yields more accurate forecasts than any single expert.

Complementary contracts in a binary market. Yes + No prices ≈ $1 (ignoring fees), reflecting complementary probabilities.