Glossary
The vocabulary of prediction markets, in plain English. Useful whether you're new to event contracts or comparing how Kalshi, Polymarket and Manifold actually differ under the hood.
Prediction market
A marketplace where participants trade contracts whose payout depends on the outcome of a real-world event. Prices typically reflect the crowd-estimated probability of that outcome.
Event contract
A standardized financial contract that pays out a fixed amount (usually $1) if a specified event occurs, and zero otherwise. Kalshi calls these "event contracts"; the CFTC regulates them as such in the US.
YES / NO shares
The two sides of a binary prediction market. A YES share pays $1 if the event happens; a NO share pays $1 if it does not. Their prices always sum to roughly $1, and each price can be read as the implied probability of that outcome.
Implied probability
The price of a YES share, interpreted as a percentage. A YES share trading at $0.62 implies the market believes there is a 62% chance the event will occur.
Orderbook
A traditional matching engine where buyers and sellers post limit orders and trades execute when prices cross. Kalshi and Polymarket both use orderbook models, giving tight spreads in liquid markets.
AMM (Automated Market Maker)
A smart-contract-based liquidity pool that prices shares algorithmically rather than matching individual orders. Early Polymarket and many newer on-chain platforms use AMMs because they always provide a quote, even in thin markets.
Resolution
The process of settling a market once the underlying event is decided. Resolution can be handled by a centralized operator (Kalshi), a decentralized oracle (UMA on Polymarket), or community vote.
Liquidity
How easily a position can be entered or exited without moving the price. Deep liquidity means tight spreads and the ability to trade size; thin liquidity means high slippage.