Prediction markets offer a unique way to trade on real-world occurrences. This predictions market guide explains the mechanics of event contracts and pricing. It also provides a walkthrough on how to trade prediction markets.
Prediction markets, like North American Derivatives Exchange, Inc. d/b/a Crypto.com Derivatives | North America (“CDNA”) and OG.com are online platforms where you trade contracts based on future real-world occurrences. These platforms let you trade a straightforward contract tied to the specific probability of an event.
Think of it as a way to put your knowledge to the test. If you think an event will happen, you buy the outcome associated with that choice; the same applies if you think it won’t happen. The price of these contracts fluctuates based on what the rest of the market believes. If your forecast is correct when the event actually happens (or doesn’t happen), you could make a profit.
It’s a level playing field where your results depend entirely on your accuracy. By bringing together thousands of different opinions, these markets often predict the future more accurately than a single expert. It’s essentially a transparent way to turn your insights into a position and see if the rest of the world agrees with you.
In the United States, these instruments operate and are traded under federal oversight for your protection. The Commodity Futures Trading Commission (CFTC) regulates the venues these contracts trade on as Designated Contract Markets (DCMs). CDNA is a CFTC-regulated exchange, which offers event contracts trading.
The price of these contracts represents the market-implied probability of an event. For example, if a ‘Yes’ contract is trading at $0.70, it suggests the market believes there is a 70% probability of that occurrence. This pricing model lets you trade your insights as financial assets. Prices fluctuate in real-time as new data and news become available to the public.
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If the predicted event outcome occurs, the winning contract typically settles at a fixed value of $1.00. If the prediction is incorrect, the contract expires at $0.00.
Your potential profit is the difference between your purchase price and the final $1.00 settlement. Because CDNA offers fully collateralized events contracts,, you must post the full value of the contract upfront. This ensures that your maximum possible loss is limited to your initial purchase amount.
Top platforms, like Crypto.com and OG.com offer a diverse range of categories to suit your area of interest. Crypto.com Predict has the following event types available:
Follow these steps to understand how to get started with prediction markets and join the exchange ecosystem:
Once you select a market, choose a potential result and enter the number of contracts you want to buy. On Crypto.com’s prediction markets, you can start trading from just $10.
You don’t always have to hold a position until the event concludes. We provide the liquidity to exit a contract early. If the market moves in your favor, you can sell your position to lock in potential profits before the final settlement.
On the other hand, if the perceived probability shifts against you, an early exit can help limit your losses. This flexibility allows you to manage risk dynamically as real-world data evolves.
Crypto.com’s platform is built for speed and reliability. We enable you to trade the results of global events across sports, politics, economics, financials and culture. Plus, you can enjoy the flexibility to fund your trades with either cash or crypto.
Receive payments in real-time shortly after events are resolved. We provide a secure, regulated environment for your trades, ensuring market integrity through robust surveillance.
Start trading prediction markets today
What is an event contract?
An event contract is a financial instrument that lets you forecast whether a specific real-world event will occur or not.
Can I exit a prediction market trade early?
Yes. Many platforms allow you to exit a contract anytime before the event settles. This enables you to lock in profits or limit potential losses based on shifting probabilities.
How much capital do I need to start?
You can get started with a relatively low amount. On our platform, you can start trading prediction market contracts from just $10.
How are prediction market prices determined?
Prices are driven by market supply and demand. They reflect the collective sentiment and the implied probability of an occurrence happening based on real-time news and data.
What happens if my prediction is incorrect?
If the event doesn’t happen as you predicted, your contract settles at $0.00. Your maximum loss is strictly limited to the initial amount you paid for the contracts.
Is trading prediction markets risky?
Yes, all trading carries risk. While your maximum loss is capped at your purchase amount, real-world events are unpredictable. Always practice disciplined risk management when trading.
Important information: This content is for informational purposes only and does not constitute financial advice. Cryptocurrency markets are volatile and carry risk. Please consult a financial adviser before making investment decisions.
Prediction is an event contract that is a derivatives product offered by Crypto.com | Derivatives North America (CDNA), a CFTC-regulated exchange. Trading on CDNA involves risk and may not be appropriate for all. By trading you risk losing your cost to enter any transaction, including fees. You should carefully consider whether trading on CDNA is appropriate for you in light of your investment experience and financial resources. Any trading decisions you make are solely your responsibility and at your own risk.
