Polymarket trading explained

Prediction markets let traders buy and sell shares tied to a real-world outcome, and on Polymarket each winning share pays $1 while the losing side goes to $0. (docs.polymarket.com) On Polymarket, every market is a single yes-or-no question, and each share trades between $0.00 and $1.00 as a live estimate of the event’s probability. A “Yes” price of $0.65 implies roughly a 65% market view that the event will happen. (docs.polymarket.com) Traders do not bet against the platform itself. Polymarket says users trade peer-to-peer through an order book, using United States dollar coin on Polygon as collateral, with $1 creating one Yes share and one No share. (docs.polymarket.com) Prices move the way stock quotes do: through supply and demand. Polymarket says the displayed probability is usually the midpoint between the best bid and best ask, unless the spread is wider than $0.10, when it shows the last traded price instead. (help.polymarket.com) That is why a trader can profit without waiting for the final result. If a trader buys “Yes” at $0.30 and later sells near $0.55 after sentiment shifts, the gain comes from the price move even before the event is resolved. (docs.polymarket.com) The reverse is also true for “No” shares. Polymarket’s documentation says traders buy No when they think the market is overestimating the chance of an event, then can sell before resolution or hold to expiry if the event does not happen. (docs.polymarket.com) Settlement depends on the market’s written rules, not just its headline. Polymarket says each market includes a resolution source, an end date, and edge-case rules, and it warns traders to read those terms before buying either side. (docs.polymarket.com) When an outcome becomes clear, Polymarket uses the UMA Optimistic Oracle to finalize it. Anyone can propose a result by posting a bond that is typically $750 in bridged United States dollar coin, and others get a 2-hour window to dispute that proposal. (docs.polymarket.com) If no one disputes, the market can resolve in about two hours. If there are disputes, the process can escalate through another proposal round and then to a UMA token-holder vote that Polymarket says takes about 48 hours after a 24-to-48-hour debate period. (docs.polymarket.com) Polymarket’s help center says trading stops once a market resolves, winners redeem for $1 per share, and losers become worthless. In a rare “unknown” or 50-50 outcome, Polymarket’s documentation says each token redeems for $0.50 instead. (help.polymarket.com) (docs.polymarket.com) Fees now vary by market category. Polymarket’s March 30, 2026 changelog says fees apply to crypto, sports, finance, politics, economics, culture, weather, technology, mentions, and general markets, while geopolitical and world-events markets remain fee-free. (docs.polymarket.com) The basic trade, though, stays the same across Bitcoin price markets and election questions: buy a side below where you think the odds should be, sell if the market moves your way, or hold until the rules determine whether that share becomes $1 or $0. (docs.polymarket.com)