#Definition
YES is one of the two outcomes in a binary prediction market, representing the affirmative resolution - the proposition or question being answered as true or occurring.
When you buy YES shares, you're betting that the event will happen or the statement is true. If the market resolves YES, your shares become worth $1.00 each (on most platforms).
#How YES Shares Work
#Buying YES
When you buy YES shares at 60¢:
- You pay $0.60 per share
- If market resolves YES: You get $1.00 per share (40¢ profit, 67% return)
- If market resolves NO: You get $0.00 per share (60¢ loss, -100% return)
#YES Share Payoff Diagram
#YES Price = Implied Probability
The price of YES shares represents the market's estimated probability:
- YES trading at 75¢ = 75% probability of YES outcome
- YES trading at 25¢ = 25% probability of YES outcome
- YES trading at 50¢ = 50/50 toss-up
#YES + NO = 100%
In a well-functioning binary market:
- YES price + NO price ≈ $1.00 (minus fees)
- If YES is 65¢, NO should be ~35¢
- Arbitrage keeps this relationship in balance
#Trading Strategies with YES
#Buying YES (Going Long)
Buy YES when you believe:
- The probability is higher than the current price suggests
- New information makes YES more likely
- The market is underestimating the chance of occurrence
Example:
Market: "Will it rain tomorrow?"
YES trading at: 30¢
Your forecast: 60% chance of rain
Action: Buy YES (expected value: 60% × $1.00 - $0.30 = $0.30)
#Selling YES (Going Short)
Sell YES when you believe:
- The probability is lower than the current price
- You think the event is overestimated
- You want to lock in profits from a previous YES purchase
Example:
You bought YES at 40¢
YES now trading at 80¢
You think true probability is 50%
Action: Sell YES, lock in 40¢ profit per share
#YES in Different Market Types
#Binary Markets (Standard)
- YES or NO
- Clear resolution: one or the other
- Example: "Will Candidate X win?" → YES or NO
#Categorical Markets
- Multiple YES outcomes, but only one resolves YES
- Example: "Who wins Best Picture?"
- "Oppenheimer": YES or NO
- "Poor Things": YES or NO
- "Barbie": YES or NO
- Only one resolves YES, others resolve NO
#Conditional Markets
- YES depends on a condition
- Example: "If Trump wins, will stocks rise?"
- Only resolves if Trump wins (condition met)
- Then resolves YES/NO on stock performance
#YES Share Mechanics
#On Traditional Platforms (Kalshi, PredictIt)
- Order book: YES bids and asks
- Discrete shares: Trade in whole or fractional shares
- Fees: Per-trade or per-withdrawal fees reduce effective payouts
#On Crypto Platforms (Polymarket, Augur)
- YES tokens: ERC-20 tokens representing YES outcome
- Transferable: Can send to other wallets
- Redeemable: Redeem for $1 USDC after YES resolution
- Composable: Use in DeFi strategies
#YES Share Value Over Time
YES shares fluctuate based on:
-
New Information
- Polls favor YES outcome → price rises
- Contradicting evidence → price falls
-
Time Decay
- As deadline approaches, uncertainty often decreases
- Can move toward 0% or 100% as outcome becomes clear
-
Liquidity Events
- Large buy order → price rises
- Large sell order → price falls
-
Volatility
- Unexpected events cause rapid swings
- "October surprise" in elections
#Psychology of YES Trading
#Optimism Bias
Traders may overpay for YES because:
- People naturally favor positive outcomes
- "It could happen!" optimism
- Wishful thinking about desired events
Example: Sports fans overvaluing their team winning
#Confirmation Bias
YES holders seek information confirming their position:
- Focus on pro-YES news
- Dismiss pro-NO evidence
- Hold too long when evidence shifts
#Anchoring
First impression of YES probability anchors later judgments:
- If initial price was 70¢, traders anchor there
- Hard to accept new 30¢ price even with changed facts
#YES vs. Shorting NO
Two ways to bet on an event:
- Buy YES at 60¢
- Sell/short NO at 40¢
These are economically similar but:
- Buying YES: Capital locked in upfront
- Shorting NO: May require margin or full capital depending on platform
- Fees: May differ for long vs. short positions
#YES in Different Contexts
#Elections
- "Trump wins" → YES or NO
- If Trump wins, all YES shares worth $1, NO shares worthless
#Economic Events
- "Fed raises rates" → YES or NO
- Binary outcome based on policy decision
#Sports
- "Team X wins championship" → YES or NO
- Clear winner determination
#Crypto
- "Bitcoin >$100k by year-end" → YES or NO
- Price-based threshold trigger
#Common YES Trading Mistakes
-
Confusing YES price with percentage
- 60¢ ≠ 60% of your investment
- 60¢ = 60% probability of YES
-
Ignoring fees
- 5% fee means YES needs to resolve YES for you to profit
- Not just >50¢, but >52.5¢ to break even
-
All-or-nothing thinking
- Just because YES is likely doesn't mean it's guaranteed
- 90¢ YES still has 10% chance of losing everything
-
Holding too long
- If you bought at 30¢ and it's now 80¢, consider selling
- Locking in 50¢ profit vs. risking it for 20¢ more
#When YES Shares Pay Off
YES shares pay $1.00 when:
- Market resolves to the YES outcome
- Resolution source confirms affirmative result
- Smart contract or platform distributes payouts
Timeline:
Market closes → Outcome determined → Resolution confirmed → YES holders receive $1/share
#YES Liquidity
YES side liquidity depends on:
- NO sellers: People willing to take the NO side
- Market makers: Providing both YES and NO liquidity
- Total volume: More trading = more liquidity
Illiquid YES markets:
- Wide bid-ask spread (YES bid: 50¢, ask: 65¢)
- Hard to enter/exit at fair price
- Slippage on larger orders
Liquid YES markets:
- Tight spread (YES bid: 60¢, ask: 60.5¢)
- Easy to trade
- Minimal price impact
#Advanced YES Strategies
#YES Spread Trading
Buy YES on one platform at 60¢, sell YES on another at 62¢ (arbitrage)
#YES Hedging
Own an asset that falls if event happens → Buy YES to hedge downside
#YES Pair Trading
Buy underpriced YES on Market A, sell overpriced YES on correlated Market B
#YES Options
Some platforms let you buy options on YES shares (right to buy at strike price)