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The Outcome Market / Two venues
The same question, three prices, one answer
The same event priced on several venues
The same question can be traded on more than one venue, and the venues will not agree. One price includes a bookmaker’s margin, another a commission, another a spread; the differences are not accidents but the costs and the crowds of each market, and reading them is how a reader learns what each price actually contains.
Desk spec
- venues
- 3
- sample prices
- 62.0 / 58.0 / 55.0
- range
- 7.0 points
- cheapest
- not automatically best
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 answerThe same event can be priced differently on each venue: on the samples 62.0% on one market, 58.0% implied at a book and 55.0% on another market, a 7-point range. The gap is not free money; each price carries a different cost - a margin, a commission or a spread - and a different crowd of traders.
One event, three prices, three costs
Comparing prices across venues only works if the costs are added first. A price that looks 7 points cheaper may carry a wider spread that gives most of it back, and a price that looks expensive may be the only one with a buyer when the reader wants to leave.
Sample H - one event on three venues, and what each price contains
| Venue | Price as a chance | What it carries | Round-trip cost |
|---|
| a book, implied | 58.0% | an overround of 6.2% | 6.2% in the price |
| market one | 62.0% | a spread of 3.3% of mid | 3.3% |
| market two | 55.0% | a wider spread on thinner volume | 6.6% |
| the range on one event | 7.0 points | not free money | varies with each |
sample H - the 7-point range, and what remains after cost
highest price = 62.0%
lowest price = 55.0%
range = 62.0 - 55.0 = 7.0 points
buy at 55.0% on market two and sell at 62.0% on market one
in theory the gap = 7.0 points
in practice:
market two's spread = 6.6% of mid, paid to open
market one's spread = 3.3% of mid, paid to close
combined cost = 6.6 + 3.3 = 9.9%
so the apparent 7-point edge is smaller than the 9.9% cost
of capturing it, and the two venues may not be tradable at the
same moment in any case.
Why the venues disagree
Three causes explain almost all of the difference. Each venue prices a slightly different question (a book may settle on a different source). Each carries a different cost structure. And each has a different crowd: a market with many informed traders and deep volume will sit closer to a consensus, while a thin one can drift for hours on little information.
sample H and G - which price to believe, by the reader's own view
if the reader believes the true chance is 60%:
the book at 58.0% is 2 points cheap
market one at 62.0% is 2 points rich
market two at 55.0% is 5 points cheap, before its 6.6% cost
against a 60% belief:
market two's 5-point edge minus 6.6% cost = -1.6 points
so the cheapest price is not the best one once its spread is paid
the discipline is the same on every venue: convert the price to a
chance, subtract the cost, and only then compare it with your view.
The prices, spreads and range on this page are invented and are not quotes from any real venue. The same event may be a bet on one venue and a derivative on another, with different regulators and different complaint routes; a reader should not assume two prices describe the same legal product.
Comparing venues without being misled
- Convert every price to a chance before comparing it with any other.
- Add each venue's cost, whether a margin, a commission or a spread.
- Check whether the venues settle on the same source and the same question.
- Check that both venues are permitted where you are, and licensed there.
- Treat a price with no depth behind it as unavailable, not as an edge.
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