how prediction markets settle
How Prediction Markets Settle
Verify the market question, cutoff, source, payout, fees, liquidity, eligibility, and special cases before taking a position.
Direct answer
A prediction market settles from its written question and resolution rules. The result is not based on a headline, social consensus, or what a user intended the question to mean.
Verify the contract
- Exact question and answer choices.
- Closing, expiry, and resolution times.
- Named resolution source.
- Treatment of ambiguous, delayed, or disputed outcomes.
- Contract price, payout, and fees.
- Executable bid or ask, spread, and depth.
- Withdrawal rules and account eligibility.
Know the main risks
Ambiguous wording can create resolution risk. Low depth and a wide spread can change the actual entry or exit price. A market price can be interpreted as a market-assigned probability under its payout rules, but it is not certainty.
Use executable prices, not the midpoint, when estimating cost.
Skip conditions
Skip when the rules are unclear, the resolution source cannot be verified, liquidity is too thin, the spread is too wide, or account access is uncertain.
Record the market and evidence in the decision log before using an external venue.