# Trading

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="/files/DXpGvkdsa0ZrVXCf5lwo" alt=""><figcaption></figcaption></figure>

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

<figure><img src="/files/hd0PsjD5jRbRxO48NRXU" 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="/files/rpc69f1Q0Ce11MFezGTy" 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="/files/EQyb7QhN9zlrMAtRsyLd" 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 %}


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