How to Read Yes/No Contracts on Prediction Markets
Every prediction-market contract has two sides: Yes wins if the event happens under the market’s rules, and No wins if it does not. The headline question matters far less than the fine print — the rules and the settlement source decide who actually gets paid.
The two sides
When you buy Yes, you are taking the position that the defined condition will be met by the deadline. When you buy No, you are taking the opposite. Whichever side is correct settles at $1; the other settles at $0.
“Will Apple close above $250 on Friday?” You buy Yes at 45¢. If the official settlement source confirms Apple closed above $250, Yes pays $1 and you make 55¢ per contract. If it closed at $250 or below, Yes pays $0 and the No side collects the $1.
Read the rules, not the headline
The most important part of any contract is the wording: the exact condition, the deadline, the official settlement source, and the edge cases. Kalshi notes that some markets wait for official data from agencies, leagues or other authorities before settling — so “above $250” might mean the official closing price, not an intraday tick.
A quick pre-trade checklist
- What is the precise condition for Yes to win?
- What is the deadline, in what time zone?
- Which source settles it, and when is that source published?
- What happens in a tie, postponement or data revision?
If you can’t answer all four, skip the market — that’s one of the common beginner mistakes. Once the contract is clear, the price tells you the implied odds; see how odds work.