What is implied probability?
Implied probability is the probability of an outcome that's baked into a market price. On Yes/No event contracts that settle to $1, the price in cents equals the implied probability percentage. A 35¢ contract implies a 35% chance Yes resolves.
How prediction markets price events
Prices emerge from the order book — every buyer and seller votes with their capital. As new information arrives, traders update bids and asks, and the price reflects the new consensus probability in near-real time.
How to interpret contract prices
Treat the price as the market's best estimate, not as truth. Compare it against your own view (use the Market Edge Calculator) and against equivalent prices on other platforms (use the Sportsbook Comparison Calculator).
Examples of implied probability
- 10¢ → 10% implied probability (a long shot, big payout).
- 50¢ → 50% (coin flip).
- 80¢ → 80% (strong favorite, small payout per contract).
Questions
Frequently asked questions
How do I convert a contract price to a probability?+
Divide the price in cents by 100. A 27¢ contract has a 27% implied probability.
Are implied probabilities accurate?+
They aggregate every trader's view and tend to be well-calibrated on liquid markets, but they can lag breaking news and over- or under-react on thinly traded contracts.
What's the difference between implied and actual probability?+
Implied probability is what the market is pricing. Actual probability is the true (unknown) chance of the event. Edge comes from finding gaps between the two.