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Probability

The probability shown on event cards comes from YES price action.
  • A: If there is a YES ask in the orderbook, we use the best available YES ask.
  • B: If the YES ask side is empty, we use the last price at which YES was bought.
A: Best available YES ask=65c    ⇒    Implied Probability=65%\text{A: Best available YES ask} = 65c \;\; \Rightarrow \;\; \text{Implied Probability} = 65\% B: Latest YES purchase=70c    ⇒    Implied Probability=70%(until a new YES ask appears)\text{B: Latest YES purchase} = 70c \;\; \Rightarrow \;\; \text{Implied Probability} = 70\% \text{(until a new YES ask appears)}
Or as single generic rule:
Implied Probability (%)=YES price in cents\text{Implied Probability (\%)} = \text{YES price in cents}

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Pricing

Market Price
  • When you are buying shares, Market Price reflects the best available ask.
  • When you are selling shares, Market Price reflects the best available bid.
PnL
  • Unrealised PnL is calculated using the best available bid (Market Price).
Unrealized PnL=(No. of Shares×Market Price)−(No. of Shares×Entry Price)\text{Unrealized PnL} = (\text{No. of Shares} \times \text{Market Price}) - (\text{No. of Shares} \times \text{Entry Price}) ROE%=Unrealized PnLMargin used×100\text{ROE\%} = \frac{\text{Unrealized PnL}}{\text{Margin used}} \times 100 Example You bought 1000 YES at an entry price of 40c ($). Current market price is 55c ($). You used 400 USDC as margin. Unrealized PnL=1000×0.55−1000×0.40=550−400=150\text{Unrealized PnL} = 1000 \times 0.55 - 1000 \times 0.40 = 550 - 400 = 150 ROE%=150400×100=37.5%\text{ROE\%} = \frac{150}{400} \times 100 = 37.5\% Entry Price Your entry price is the average price you paid for all your shares: Entry Price Entry Price=(Q1×P1)+(Q2×P2)+⋯+(Qn×Pn)Q1+Q2+⋯+Qn\text{Entry Price} = \frac{(Q_1 \times P_1) + (Q_2 \times P_2) + \cdots + (Q_n \times P_n)}{Q_1 + Q_2 + \cdots + Q_n} Where:
  • QiQ_i = Number of shares in fill i
  • PiP_i = Price of fill i
Example Entry Price=(1000×75c)+(1000×25c)2000=50c\text{Entry Price} = \frac{(1000 \times 75c) + (1000 \times 25c)}{2000} = 50c Outcome PnL at resolution PnLwin=(No. of Shares×1)−(Entry Price×No. of Shares)\text{PnL}_{\text{win}} = (\text{No. of Shares} \times 1) - (\text{Entry Price} \times \text{No. of Shares}) PnLlose=(No. of Shares×0)−(Entry Price×No. of Shares)\text{PnL}_{\text{lose}} = (\text{No. of Shares} \times 0) - (\text{Entry Price} \times \text{No. of Shares})