> For the complete documentation index, see [llms.txt](https://docs.supercharged.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.supercharged.io/prediction-market/how-does-it-works/trading.md).

# Trading

The outcomes of events by trading shares

Outcome Pricing and Event Resolution

* **Outcome Pricing**: All outcomes are priced between $0 and $1.
* **Total Event Price**: The prices of <mark style="color:green;">Yes</mark> and <mark style="color:red;">No</mark> outcomes always sum to $1.
* **Event Resolution**: Buy shares of an outcome at its current price. If it’s correct when the market resolves, your shares are worth $1. All other shares drop to $0.
* **Potential Return**: Your return if you’re right! It’s the difference between your buy price and the $1 payout if you nail the prediction.

<figure><img src="https://1930733640-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FyiDGLljOSfCl1s5MtgJA%2Fuploads%2FyA38shg487bI8OoZxb7P%2FA%CC%89nh%20chu%CC%A3p%20Ma%CC%80n%20hi%CC%80nh%202024-06-27%20lu%CC%81c%2014.59.03.png?alt=media&amp;token=dc34b1f3-dda6-4c3d-9cb2-e949e1eb9eac" alt=""><figcaption></figcaption></figure>

### **Step-by-step** guide to understanding how shares are created and traded on SuperCharged:

<figure><img src="https://1930733640-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FyiDGLljOSfCl1s5MtgJA%2Fuploads%2FwgFYh4jySvYAMDU8vLLi%2FA%CC%89nh%20chu%CC%A3p%20Ma%CC%80n%20hi%CC%80nh%202024-06-27%20lu%CC%81c%2014.44.21.png?alt=media&amp;token=337abfe1-70c0-411e-b43a-555be99362ae" alt=""><figcaption></figcaption></figure>

**Step 1: Order Matching**:

* Zack strongly believes that Biden will drop out of the presidential race. He is willing to pay $0.60 for a share of <mark style="color:green;">Yes</mark>.

<figure><img src="https://1930733640-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FyiDGLljOSfCl1s5MtgJA%2Fuploads%2FjB675Pe7caHf8fG5rzlk%2FA%CC%89nh%20chu%CC%A3p%20Ma%CC%80n%20hi%CC%80nh%202024-06-27%20lu%CC%81c%2014.46.44.png?alt=media&amp;token=91a040dc-8344-4132-aa8a-d9976235ffa5" alt=""><figcaption></figcaption></figure>

* When Zack places his order, SuperCharged automatically creates an opposing order priced at $0.40 for a share of <mark style="color:red;">No</mark>, based on the order book mechanism where the total price of the <mark style="color:green;">Yes</mark> and <mark style="color:red;">No</mark> shares must sum to $1. This ensures the market remains balanced

<figure><img src="https://1930733640-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FyiDGLljOSfCl1s5MtgJA%2Fuploads%2F5LmpYH7rDjnVb8eQc2DU%2FA%CC%89nh%20chu%CC%A3p%20Ma%CC%80n%20hi%CC%80nh%202024-06-27%20lu%CC%81c%2014.47.48.png?alt=media&amp;token=67e4120d-f7ff-479b-9a67-1a5bc49c7b06" alt=""><figcaption></figcaption></figure>

* On the other hand, Robin thinks Biden will stay in the race and places an order at the best available prices $0.40 for a share of <mark style="color:red;">No</mark>.
* SuperCharged matches these orders and collects a total of $1 from Zack and Robin.

{% hint style="danger" %}
If the total price offered by Zack and Robin does not sum to $1, both orders will wait until a matching order is found.
{% endhint %}

**Step 2: Share Creation**:

* SuperCharged creates a complete set of shares.
* Zack receives a share of <mark style="color:green;">Yes,</mark> confirming his belief that Biden will drop out
* Robin receives a share of <mark style="color:red;">No,</mark> supporting her belief that Biden will stay in the race

**Step 3: Trading Shares**:

* Once the shares are created, they can be freely traded on the market.

**Step 4: Event Resolution**:

* If Biden does drop out of the presidential race, Zack's "<mark style="color:green;">Yes</mark>" outcome is correct, he will receive $1 per share.
* Zack’s profit is the difference between his initial investment ($0.60 per share) and the final payout ($1 per share), resulting in a profit of $0.40 per share.

{% hint style="warning" %}
Conversely, if Robin's "No" outcome is correct and Biden stays in the race, she will receive $1 per share
{% endhint %}