Prediction markets let people trade on the outcome of real-world events, elections, economic data releases, policy decisions, and more. This guide explains how they work, how to read a contract price as a probability, and where people access these markets today. It is platform-agnostic: availability and rules differ by venue and by jurisdiction, and they change over time, so treat this as a map of the concepts rather than a recommendation of any single platform.
A prediction market is a venue where people trade contracts tied to the outcome of a real-world event: an election, a rate decision, whether a bill passes, whether a company hits a stated target. Each contract, sometimes called an event contract, represents a claim on a single yes-or-no outcome.
Shares trade somewhere between 0 and 100 cents. A share resolves to $1 if the event happens and $0 if it does not. Because of that binary payoff, the market price behaves as an implied probability: a contract trading at 62 cents means the market as a whole is pricing roughly a 62% chance the event occurs.
When an outcome becomes verifiable, the election is called, the data prints, the vote happens, the market resolves. Outstanding shares settle at $1 or $0 and trading stops. Some markets resolve on a fixed date; others resolve whenever the underlying event happens, which can be earlier or later than the market originally expected.
Prediction markets work on a simple premise: aggregate the views of many independent participants, weighted by how much they are willing to risk, and the resulting price tends to be a better probability estimate than any single forecaster's guess. This is the same wisdom-of-crowds effect that shows up in other markets. No single trader needs to be right, but anyone who spots a mispriced contract has a financial incentive to trade it back toward fair value, and that correcting pressure is what keeps prices anchored to reality.
That mechanism is not perfect. A few failure modes recur across prediction markets:
None of this means prices are wrong more often than not. On balance they tend to track outcomes closely, which is why it is worth treating the price as a strong prior rather than a guarantee.
Reading a prediction market mostly comes down to translating price into probability, then asking what could move that probability.
Prediction markets are not a single product, they are a category, and the venues differ in how they settle trades, who they are built for, and which questions they cover. None of the following is a recommendation. Availability, rules, and eligibility vary by jurisdiction and change over time, so check current terms wherever you are before using any platform.
Polymarket is a crypto-settled prediction market that operates globally on a blockchain-based order book. Contracts are typically denominated in a stablecoin, and settlement happens on-chain rather than through a traditional brokerage account. Its markets span an unusually wide range of topics: elections and geopolitics, macro data releases, crypto-native questions, and cultural events, often with more granular and more numerous contracts than exchange-style venues. It tends to suit traders already comfortable with crypto wallets who want broad topic coverage. Access and legal treatment vary by country, so eligibility should always be checked locally.
Kalshi is a US-based exchange regulated by the Commodity Futures Trading Commission, which places it in a different regulatory category from offshore or crypto-settled venues. It lists event contracts on economic data, weather, politics, and other scheduled outcomes, trading and settling in US dollars through a conventional exchange structure. Because it operates under CFTC oversight, it tends to suit US-based traders who want a regulated, dollar-denominated venue with a more curated set of listed markets than crypto-native platforms. Listed products and eligibility are set by the exchange and its regulator and can change, so check current terms directly.
A handful of other platforms serve narrower niches. Manifold runs on play-money rather than real capital, useful for practicing forecasting or following a community's collective view without financial risk. Metaculus is a forecasting-only platform, no trading, just aggregated probability estimates from a community of forecasters, useful as a research input even though you cannot take a position on it. Legacy platforms such as PredictIt occupy a smaller, more specialized corner of the space, often with position limits and a narrower market list. As with the larger venues, terms and availability differ by platform and jurisdiction.
Beyond trading them directly, macro-minded traders increasingly read prediction market prices as a data input, a continuously updating probability estimate for events that do not otherwise have a clean market-based proxy. A contract pricing a high chance of a rate cut, or a low chance of a recession within a given window, reflects a live, crowd-funded probability that updates as news breaks, often faster than surveys or expert forecasts.
That is the same instinct behind Convex's own macro coverage, which weighs a range of probability-weighted outcomes rather than a single forecast. The regime page and the metrics directory track many of the same underlying releases that prediction markets are pricing, so reading both side by side can sharpen your sense of where the crowd and the data agree, or where they diverge.