Leaving a position before the event resolves

A contract can be sold before the event resolves, but only if someone is buying. The price on the screen is the best order resting, not a promise of a buyer at that price for any size, and on a thin contract the exit can be partial or absent exactly when a reader wants it most.

Desk spec

attempted exits: 120
filled at the touch: 71
no bid at all: 16
median time to fill: 4 minutes

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 can be sold before settlement, but the price shown is the best resting order, not a guarantee for any size. On the samples 71 of 120 attempted exits filled at the touch, 33 filled only in part and 16 found no bid at all. The risk of a thin book is an exit that is slow, partial or impossible.

What an exit really is

Selling a contract is not a reversal of the purchase; it is a second trade against whatever is resting on the book. That is why the exit price can be worse than the entry price even when the market has moved in the reader's favour, and why size matters more than direction.

Sample I - 120 attempts to close a position early
Result	Attempts	Share	What the seller got
filled at the touch	71	59.2%	the best resting bid, for the full size
filled only in part	33	27.5%	some of the size, at one or more prices
no bid at all	16	13.3%	nothing, and the position stays open
total	120	100%	median time to fill: 4 minutes

sample I - the exit, in counts and time attempts = 120 filled at the touch = 71 / 120 = 59.2% partial = 33 / 120 = 27.5% no bid = 16 / 120 = 13.3% so an exit fails or is incomplete 49 of 120 = 40.8% of the time median time to fill = 4 minutes the worst case is not a bad price: it is no price at all, which leaves the position exposed to settlement whether the reader wanted that exposure or not.

Why a thin book widens the cost

A thin book has two effects at once: the spread widens, and the size available shrinks. Both make the exit more expensive. A reader who needs to be able to leave should check the resting size on the bid before opening, not after.

sample I and B - a thin exit against a wide spread entry at the ask = 62c a normal bid-to-bid exit = 60c -> cost 2c a thin book widens the spread to 56/62: exit at 56c = 62 - 56 = 6c a contract as a share of the 59c mid = 6 / 59 = 10.2% so the same decision, made when there is no bid, costs three times the spread of a liquid moment to undo.

The fill counts and times here are invented. Real liquidity varies with the event, the venue and the moment; a reader should treat any price on a screen as an offer available only up to the size resting behind it.

Before opening a position you may want to leave

Check the size resting on the bid, not just the best bid price.
Decide in advance whether you are willing to hold to settlement.
Plan for a partial fill, and know what you will do with the remainder.
Expect the spread to widen when the event is close or volatile.
Treat a contract with no resting bid as one you cannot exit at all.

Leaving a position before the event resolves

What an exit really is

Why a thin book widens the cost

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