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The Outcome Market / Questions
Twelve questions, answered plainly

Event-contract questions, answered

The questions a reader arrives with are shorter than the answers the desk gives elsewhere. Each one is answered directly here, from the same ten invented samples, and each answer links to the page that develops it.

Desk spec
questions
12
samples
10 invented
price
62c
payout
1.00
the contractA question turned into a tradable share. It pays a fixed amount on yes and nothing on no, and its price sits from 0c to 100c. On the samples it pays 1.00 and trades at 62c.
the priceThe market's implied chance of the event, so 62c is a 62.0% chance. The bid and the ask bracket it, and the 2c between them is the first cost a trader pays.
the settlementThe named source publishes the answer, and the payout follows. Of 200 sample contracts, 176 settled from the source and 4 were voided and refunded.
Direct answer

An event contract is a price from 0 to 100 that pays a fixed amount if a named event resolves yes. Twelve questions are answered below: what the price means, what a contract pays, who settles it, what a void does, what it costs to trade, whether it can be sold early, and which regulator applies. Every figure derives from the ten invented samples.

The quick answers

What is the price? The market's implied chance of yes, so 62c is 62.0%.
What does it pay? 1.00 on the samples if yes, 0.00 if no.
Who settles it? The source named in the contract's own rules.
What does a void do? Refunds the price paid, not the payoff.
What does it cost? A 2c spread and a 2c fee, 6.6% of mid, on the samples.
Can I sell early? Only if a buyer is resting; 16 of 120 exits found none.
the three numbers most readers want price of the sample contract = 62c -> implied 62.0% payout on yes = 1.00 -> gain 0.38 = 61.3% loss on no = 0.62 = the whole price paid all-in cost to open and close = 4c = 6.6% of the 61c mid
The answers describe the samples, not any real product. A real contract's question, source, payout and rules are set by the venue that lists it, and a reader should read those rather than rely on a general explanation.
Three questions to answer before using any venue
  • Is the product permitted where I am, and is the venue licensed there?
  • What is the exact question, the source and the void rule in this contract's own wording?
  • What does it cost me to open, to close, and to be stuck to settlement?

Read next

The contractThe five fields in detailSettlementThe source and the void ruleWho regulates itThe classification questionThe numbersEvery figure in one place

The questions, in full

q01

What is an event contract?

A tradable share priced from 0 to 100 that pays a fixed amount if a named event resolves yes and nothing if it resolves no. On the samples it costs 62c and pays 1.00 on yes, so the price is also the market’s chance of the event.

q02

Is the price a prediction?

No. It is the market’s implied probability, 62.0% at a price of 62c, and the 38% of the time the event resolves no is already inside it. A correct probability still loses on any single contract.

q03

What can I lose?

At most the price paid for the position. On the samples 100 contracts at 62c put 62.00 at risk and can gain at most 38.00, because a contract is worth between 0.00 and 1.00 at settlement, with no leverage and no margin call.

q04

Who decides the answer?

The source named in the contract’s own rules. On the samples 176 of 200 contracts settled straight from it, 14 after a clarification, 6 resolved early and 4 were voided and refunded.

q05

What happens if the event is cancelled?

The contract is voided and the price paid is refunded, so the holder receives 0.62 on the sample rather than 1.00 or 0.00. The spread and the fee already spent to acquire it are not returned.

q06

What does it cost to trade?

A 2c spread and a 2c taker fee on the samples, a 4c round trip that is 6.6% of the 61c mid. Maker fills paid no fee, and 74 of 100 fills were maker fills.

q07

Can I sell before the event resolves?

Only if someone is buying. On the samples 71 of 120 exits filled at the touch, 33 filled only in part and 16 found no bid at all, so a position can be stuck to settlement.

q08

Is it the same as a fixed-odds bet?

No. A bet is priced by a bookmaker that is the counterparty and builds in a margin; an event contract is priced by traders on a book, has no house margin, and can be sold before the result.

q09

Same as a betting exchange?

Closer, but not the same. An exchange usually prices sport between two users and charges commission; an event contract prices any event with a named source and charges a spread, and its underlying is not restricted to a sports fixture.

q10

Who regulates it?

It depends on local law. Some countries treat it as a bet under a gambling regulator, some as a derivative under a financial one, and some prohibit it; a reader must check the position where they are.

q11

Why do two venues disagree?

Different costs, different settlement sources and different crowds. On the samples one event sat at 62.0%, 58.0% and 55.0%, a 7.0-point range, and the cheapest price carried the widest spread.

q12

Can I lose more than I paid?

Not on a contract held long. The price is all that is at risk, so 62.00 on 100 contracts at 62c is the most that can be lost, and there is no mechanism that can call for more money.