Prediction markets offer a way to trade on the US midterm elections before voters head to the polls. But how do election prediction markets work and what do their prices actually tell you? Here's how they work, what the prices mean and how to trade political events with Crypto.com’s Predict platform.
Election prediction markets are markets where people buy and sell contracts tied to election results. Rather than voting for a candidate, you’ll take a position on a specific election-related question.
For example, an event contract might ask: “Will the Democratic Party win a majority in the US House of Representatives in the 2026 midterm elections?” You can then select 'Yes' if you believe it will happen or 'No' if you believe it won't.
Each contract has a price between $0 and $1, which changes as people trade. When the contract is settled, each contract with the correct prediction pays $1, while the incorrect position receives $0. This means you can lose the full amount paid for a contract if your prediction is wrong.
Learn more about prediction markets
Election prediction markets can cover presidential elections and congressional races. The 2026 US midterms offer questions about individual election results, which party will control Congress and how many seats each party might win.
Scheduled for November 3, 2026, the midterms take place halfway through the president's four-year term. Voters will elect all 435 members of the House of Representatives, 35 senators and governors in 36 states.
Although the presidency isn't on the ballot, the results could change which party controls Congress. This may affect how easily the president's agenda gets through Congress and influence federal policy over the following two years.
In the US, election event contracts can be offered through exchanges regulated by the Commodity Futures Trading Commission (CFTC).
The CFTC oversees these exchanges and requires them to follow rules governing trading activity and customer protections. This differs from traditional sportsbooks, which operate under state gambling laws.
Regulation provides oversight, but it doesn't prevent trading losses.
Election prediction markets work by matching buyers and sellers who want to trade contracts linked to election results. Traders place orders on an exchange, which matches them when their prices match. As expectations about an election change, traders may adjust their orders, causing contract prices to rise or fall.
A contract's price can be expressed as a percentage showing how likely traders think a result is. For example:
‘Yes’ contract price | Market-implied probability |
$0.20 | 20% |
$0.40 | 40% |
$0.65 | 65% |
$0.80 | 80% |
If a 'Yes' contract trades at $0.65, its price suggests a 65% chance of that result happening. This is called the ‘market-implied probability’. It reflects traders' expectations, not a guaranteed result or official election forecast.
It's also an approximate, because of fees and the gap between buying and selling prices, 'Yes' and 'No' prices don't always add up to exactly $1.
Your potential gain or loss depends on the price you pay for a contract and whether your prediction is correct. A single correct contract pays $1 at settlement, so your gross gain is the difference between $1 and your purchase price. If your prediction is incorrect, you lose the full amount paid for the contract.
This excludes trading fees, which can reduce your returns or increase your total loss.
Here’s a quick example. Suppose you buy one ‘Yes’ contract for $0.65 on whether a particular party will win control of the Senate.
If ‘Yes’ is correct:
If ‘Yes’ is incorrect:
Yes, you can sell an event contract before the election if there's another trader willing to buy it. This allows you to close your position without waiting for settlement.
For example, suppose you buy a 'Yes' contract for $0.40:
Read next: Payout structures in event contract trading
The 2026 midterm election odds can change throughout the campaign as new information influences traders' expectations. Understanding what drives these changes can help explain why contract prices rise or fall.
Election odds change as traders react to new information about a race. Things like poll results or candidate withdrawals can affect what people expect to happen.
For instance, if a ‘Yes’ contract in a Senate race is trading at $0.45 and a new poll suggests the candidate has gained support, more traders might buy ‘Yes’ contracts. If the trading price rises to $0.55, the market-implied probability increases from 45% to 55%.
The latest contract price isn't always the price you'll pay. Buyers and sellers may be willing to trade at different prices, creating what's known as a bid-ask spread.
For example, if the highest bid is $0.52 and the lowest ask is $0.56, you may need to pay $0.56 to buy a contract immediately.
Markets with more active traders tend to have smaller spreads. In less active markets, such as individual congressional races, the difference can be wider, which could make it harder to trade at your preferred price.
Midterm election event contracts can cover all kinds of political questions.Traders can take positions on different parts of the election.
Here are four common types. They're examples only, not confirmed listings on Crypto.com Prediction Trading.
These contracts ask whether a particular political party will hold a majority in the House or Senate after the election. For example: “Will the Republican Party control the US Senate following the 2026 midterm elections?”
Some contracts focus on a particular Senate contest, House district or governor's election. For example: “Will Candidate A win the Senate election in State X?”
These contracts focus on a single race, so local polls or developments involving the candidates may have a greater influence on prices.
Instead of asking whether a party will control the House, a contract might ask: “Will the Democratic Party win at least 220 House seats?”
Some markets may offer several possible seat ranges, each with its own contract. These contracts require particular attention to the wording: winning at least 220 seats is different from winning exactly 220 seats.
Some election markets may focus on how comfortably a candidate or party wins. For example: “Will Candidate A win by more than five percentage points?”
A candidate could win the election without meeting the margin specified in the contract.
Political polls and prediction markets both offer information about elections, but they measure different things. A poll asks a sample of people about their voting intentions or preferences. A prediction market reflects the prices at which participants are willing to trade contracts on future election results.
Prediction markets | Political polls | |
What they measure | Market expectations about a result | Responses from surveyed voters |
How figures are determined | Trading activity between participants | Poll results and survey calculations |
How often they change | As market orders and trades change | When new survey results are published |
Financial commitment | Traders pay for contracts | Respondents don't pay to answer |
Regulation in the US | Federal CFTC oversight for regulated contracts | Survey activity isn't regulated as derivatives trading |
Prediction markets can respond to new information faster than polls, but that doesn't necessarily make them more accurate. Neither method can predict election results with certainty.
Polls depend on how respondents are selected and whether they reflect the people who actually vote. Prediction market prices reflect traders' expectations but can be influenced by low trading activity or large orders.
Voter turnout adds uncertainty to midterm elections, as participation can differ from presidential election years.
Remember that prediction market prices reflect traders' expectations, not certain election results. Before trading the 2026 midterm elections, consider the following:
Past performance doesn’t guarantee future results.
You can trade election event contracts* through Crypto.com Prediction Trading in the Crypto.com App or Predict Pro on Crypto.com Exchange. Both allow you to take ‘Yes’ or ‘No’ positions on available events, although account setup and trading features differ.
Here's how to get started.
Choose how you want to access prediction markets:
Browse the available political events and select a market you're interested in. Depending on current listings, 2026 midterm election contracts may cover congressional control or individual races. Select a contract to view its price and trading details.
Check exactly what the contract asks and how the result will be determined. Pay attention to the expiration date and any special settlement conditions. For example, a contract requiring official election certification may not settle when news outlets first project a winner.
Select ‘Yes’ or ‘No’, then enter the number of contracts you want to trade. You can then place a market order or a limit order.
Always review the estimated cost and potential loss before confirming your order.
Once your order is filled, you can track it through your open positions. You may be able to close the position before settlement if there's enough trading activity. Otherwise, you can hold it until the contract settles according to its rules.
Explore prediction markets on Crypto.com
* Eligibility requirements apply.
Yes, election event contracts can be traded on CFTC-regulated exchanges in the US, subject to applicable rules and eligibility requirements. However, legal disputes concerning prediction markets continue, and not all contracts are available in every state.
It depends on the contract's rules. A contract can stay active or have specific conditions for candidate withdrawals. Check the terms to understand how a withdrawal could affect settlement.
A recount or legal challenge may delay settlement until the result is confirmed. The timing depends on the contract's rules and how the election results are confirmed .
Yes, if separate contracts are available. For example, you could take a ‘Yes’ position on one party controlling the House and another on the other party controlling the Senate. Each contract settles independently.
The minimum amount depends on the platform, contract price and order requirements. On Crypto.com Prediction Trading, you can start from $10, although individual contract requirements and fees may vary.
Important information: This content is for informational purposes only and does not constitute financial advice. 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.
