Understanding Odds & Probabilities
Polymarket prices = probabilities. Here's how to read them.
Price = Probability
| Share Price | Market Thinks... |
|---|---|
| $0.10 | 10% chance of happening |
| $0.50 | 50% chance (coin flip) |
| $0.75 | 75% chance (likely) |
| $0.95 | 95% chance (very likely) |
Calculating Potential Profit
Formula:
Profit per share = $1.00 - Buy Price
| Buy Price | If You Win | Profit | Return |
|---|---|---|---|
| $0.10 | +$0.90/share | 900% | 10x |
| $0.30 | +$0.70/share | 233% | 3.3x |
| $0.50 | +$0.50/share | 100% | 2x |
| $0.70 | +$0.30/share | 43% | 1.4x |
| $0.90 | +$0.10/share | 11% | 1.1x |
Risk vs Reward
| Low Odds ($0.10-0.30) | High Odds ($0.70-0.90) |
|---|---|
| High reward if you win | Low reward if you win |
| Low probability of winning | High probability of winning |
| Good for contrarian bets | Good for "safe" bets |
| Higher risk | Lower risk |
Example Trade
Market: "Will crypto reach $100K?" Current price: $0.35 (35% probability)
| Investment | If YES Wins | Profit |
|---|---|---|
| $100 buys 285 shares | 285 × $1 = $285 | +$185 (185%) |
| Investment | If NO Wins | Loss |
|---|---|---|
| $100 buys 285 shares | 285 × $0 = $0 | -$100 (100%) |
Pro Tip
Look for mispriced odds. If you think an event has 60% chance but market shows 40% ($0.40), that's a potential opportunity!