What is a prediction market?

A prediction market is a place where people trade on the outcome of a future event. Instead of a poll asking what people say they expect, a prediction market asks what they are willing to pay — and the resulting price doubles as a live, constantly updated probability estimate.

The building block is a simple contract. On Polymarket, whose markets Knoww tracks, each market is a question with a written rule for how it settles — “Will X happen by date Y?” A Yes share pays $1 if the event happens and $0 if it does not; a No share pays the reverse. Between now and resolution, both trade at prices between $0 and $1.

Why the price is a probability

Suppose a Yes share trades at 62¢. Anyone who thinks the true chance is higher than 62% sees a profitable buy; anyone who thinks it is lower sees a profitable sell. Trading pushes the price toward the point where neither side has an edge — which is the crowd’s aggregate probability estimate. That is why a 62¢ price is read as a 62% implied probability.

Nothing forces you to hold to the end. If news moves the price to 80¢ next week, you can sell and lock in the gain — prediction-market positions trade continuously, like any other market.

Where the prices come from

Every number you see on Knoww comes from live Polymarket order books: real bids and offers from traders with money at stake. There is no editorial panel setting the odds and no model producing a forecast — the probability is the price. That gives prediction markets three useful properties:

• They update instantly. Prices react to news in minutes, not at the pace of a polling cycle.
• They aggregate private information. Anyone who knows something the crowd does not can profit by trading on it, which pulls that information into the price.
• They are accountable. A pundit’s wrong call costs nothing; a trader’s wrong call costs money. Prices reflect beliefs people are willing to back.

What happens when a market ends

Each market has an end date and a written resolution rule. When the outcome is known, the market resolves: winning shares redeem for $1, losing shares for $0. Between the close of trading and official resolution there is often a verification window — our guide on how prediction markets resolve walks through that process, including how disputes are handled.

Limitations worth knowing

Prediction markets are a powerful signal, not an oracle. Keep these limits in mind when you read one:

• Thin markets are noisy. A market with little volume can be moved several points by one modest trade. Check volume and liquidity before treating a price as the crowd’s considered view.
• Extreme prices are less reliable. Markets tend to slightly overprice longshots and underprice near-certainties (the favorite–longshot bias), so a 3¢ price does not mean a clean 3% chance.
• Money has a time cost. Buying a 95¢ share that resolves in a year ties up capital for a ~5% gross return — some of that price reflects the wait, not just the probability.
• A probability is not a promise. Events priced at 20% happen one time in five. A market being “wrong” once tells you little about whether its prices are well calibrated overall.

Where Knoww fits

Knoww is a reading layer for these markets. The markets feed tracks live Polymarket odds across politics, crypto, sports, and more, and the browser extension surfaces relevant markets next to the articles and posts you are already reading. Knoww does not operate or resolve any market and never takes custody of funds — trades happen on Polymarket, from your own wallet. For the full picture, see how Knoww works.

Ready for the next level of detail? Learn to read an order book in how to read prediction-market odds.