💡Trading
The outcomes of events by trading shares
Last updated
The outcomes of events by trading shares
Last updated
Outcome Pricing and Event Resolution
Outcome Pricing: All outcomes are priced between $0 and $1.
Total Event Price: The prices of Yes and No 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.
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 Yes.
When Zack places his order, SuperCharged automatically creates an opposing order priced at $0.40 for a share of No, based on the order book mechanism where the total price of the Yes and No shares must sum to $1. This ensures the market remains balanced
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 No.
SuperCharged matches these orders and collects a total of $1 from Zack and Robin.
If the total price offered by Zack and Robin does not sum to $1, both orders will wait until a matching order is found.
Step 2: Share Creation:
SuperCharged creates a complete set of shares.
Zack receives a share of Yes, confirming his belief that Biden will drop out
Robin receives a share of No, 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 "Yes" 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.
Conversely, if Robin's "No" outcome is correct and Biden stays in the race, she will receive $1 per share
