A prediction market price looks precise: 62% for yes, 38% for no. But the number only becomes meaningful after you know exactly what the contract considers a win. The title is a useful label; the resolution rules are the actual product.
That distinction matters because similar wording does not guarantee identical exposure. A date, data source, or cancellation clause can turn two apparently matching markets into different questions.
The contract is the forecast
Imagine two markets asking whether a candidate will win an election. One settles from the certified national result. Another settles from a named media projection before a fixed deadline. Both titles may sound interchangeable, but a delayed count, recount, or court challenge could cause the contracts to behave differently.
A market does not predict a headline. It predicts the outcome defined by its complete settlement terms.
Four details to check before comparing prices
- Outcome definition: What exact event must occur for the contract to settle “yes”?
- Resolution source: Which authority, publication, filing, or dataset makes the final determination?
- Time boundary: What is the deadline, and which time zone governs it?
- Edge cases: How are postponements, ties, corrections, cancellations, or ambiguous results handled?
Small words can create large differences
Contract language often turns on words such as “announced,” “confirmed,” “signed,” “takes effect,” or “by.” A policy can be announced without becoming law. A deal can be signed without closing. A launch can occur in a limited region without becoming generally available. Each verb points to a different observable event.
Even a compact condition such as on or before 11:59 p.m. ET can separate one contract from another that uses UTC or waits for an official filing.
A practical comparison process
- Open the complete rules for every market you want to compare; do not rely on the card title.
- Write the required event, source, deadline, and exception policy in one sentence for each contract.
- Mark any difference that could realistically change settlement, even if the chance appears small.
- Only treat the prices as a true disagreement after the contracts pass that equivalence check.
Equivalent is not the same as similar
A pair of contracts can be useful to view together even when they are not perfectly equivalent. In that case, the spread may reflect the difference between the questions rather than a pricing error. The honest label is “related” or “overlapping,” not arbitrage.
This is why our markets comparison view should be a starting point for due diligence, not a replacement for reading the source contracts.
What the price really means
Once the rules are clear, the probability becomes easier to interpret. It is not an abstract forecast of what will happen in the world. It is the market’s estimate that this particular contract will resolve yes under its stated terms.
Reading those terms may feel slower than scanning prices, but it prevents the most expensive category error in prediction-market analysis: comparing numbers that answer different questions.
Once the rules are clear, the probability becomes easier to interpret. It is not an abstract forecast of what will happen in the world. It is the market’s estimate that this particular contract will resolve yes under its stated terms.
Reading those terms may feel slower than scanning prices, but it prevents the most expensive category error in prediction-market analysis: comparing numbers that answer different questions.
Once the rules are clear, the probability becomes easier to interpret. It is not an abstract forecast of what will happen in the world. It is the market’s estimate that this particular contract will resolve yes under its stated terms.
Reading those terms may feel slower than scanning prices, but it prevents the most expensive category error in prediction-market analysis: comparing numbers that answer different questions.
Once the rules are clear, the probability becomes easier to interpret. It is not an abstract forecast of what will happen in the world. It is the market’s estimate that this particular contract will resolve yes under its stated terms.
Reading those terms may feel slower than scanning prices, but it prevents the most expensive category error in prediction-market analysis: comparing numbers that answer different questions.
Once the rules are clear, the probability becomes easier to interpret. It is not an abstract forecast of what will happen in the world. It is the market’s estimate that this particular contract will resolve yes under its stated terms.
Reading those terms may feel slower than scanning prices, but it prevents the most expensive category error in prediction-market analysis: comparing numbers that answer different questions.
Once the rules are clear, the probability becomes easier to interpret. It is not an abstract forecast of what will happen in the world. It is the market’s estimate that this particular contract will resolve yes under its stated terms.
Reading those terms may feel slower than scanning prices, but it prevents the most expensive category error in prediction-market analysis: comparing numbers that answer different questions.
Once the rules are clear, the probability becomes easier to interpret. It is not an abstract forecast of what will happen in the world. It is the market’s estimate that this particular contract will resolve yes under its stated terms.
Reading those terms may feel slower than scanning prices, but it prevents the most expensive category error in prediction-market analysis: comparing numbers that answer different questions.
