Event contracts let you trade on the outcome of real-world events, such as sports results, market movements or economic reports, by predicting ‘Yes’ or ‘No’ to a specific question. Consider our offering on Crypto.com Predict.
This document is for informational purposes only and does not constitute investment advice or a solicitation to trade. All trading involves risk and you could lose your entire investment. The products and platform discussed herein are offered by Crypto.com | Derivatives North America, a CFTC-regulated exchange and clearinghouse. Please see below for further disclosures.
Event contracts are ‘Yes/No’ trading products that allow you to speculate or hedge on the outcomes of real-world events, rather than traditional financial assets. Unlike conventional investing where you buy and physically hold assets like shares, bonds, real estate or crypto, event contracts offer a fundamentally different approach.
In basic terms, you’re placing informed trades on whether a specific event will occur or not. These contracts are fundamentally linked to the prediction markets, which harness collective intelligence to forecast future outcomes.
The nature of event contracts makes them accessible to traders of all experience levels. You predict whether an event will happen (Yes) or not (No) and then place your trade accordingly.
Event contracts let you put your money where your predictions are. If you think your sports team will win the championship or a new star player will hit a milestone? There’s often a market for that.
Think you can predict the outcome of the next election, predict a politician’s future approval rating or predict a major policy shift? Political events can be traded too. Trading on future economic figures is also popular, from predicting the Federal Reserve’s next rate move to predicting GDP or jobs numbers before they land.
The appeal of event contracts lies in their non-traditional format. Instead of needing to analyze company financials or market fundamentals, traders focus on researching events, understanding probabilities and making predictions based on available information. Arguably, this democratizes trading by allowing users to attempt to profit from their knowledge in specific real-world domains.
Our Crypto.com Predict platform has made event contracts as accessible as possible, offering a beginner-friendly experience where you can browse available events, analyze the probability and execute trades based on your predictions once you have completed regulatory required onboarding.
Many analysts think that event contracts represent a paradigm shift from asset based investing to outcome based trading, where a market can be created around virtually any verifiable future event. This bridges the gap between the traditional financial markets and the prediction markets by transforming your insight into tradable instruments.
While these instruments are more straightforward than many other financial products, it’s important to understand how to trade event contracts:
You can start by choosing an event from our Crypto.com Predict marketplace, where we offer hundreds of real-world events to trade across dozens of categories. You can browse through sports events ranging from individual game outcomes to season long championships, political developments including election results and policy decisions and economic announcements such as Federal Reserve rate-setting decisions.
Each event will be clearly defined with specific terms and resolution criteria, ensuring there's no ambiguity about what constitutes a ‘Yes’ or a ‘No’ outcome.
You’ll be able to filter events by category, popularity and time frame, making it straightforward to find contracts that match your interests and expertise. For example, a specific event might be ‘Will Team A win the next Super Bowl?’ or ‘Will the next Federal Reserve interest rate decision be a cut?’
Each contract includes detailed information about the event, its resolution date and the specific conditions that determine the outcome.
Every event contract operates on a straightforward system, where either the event happens (Yes) or it doesn't (No).
The contract’s pricing mechanism will reflect the market's collective assessment of the event's likelihood. Contracts are typically priced between $0.01 and $0.99, where the price represents the implied probability of the event occurring. =
For example, a ‘Yes’ contract priced at $0.70 suggests that the market opinion is that there is a 70% chance the event will happen. Conversely, the corresponding ‘No’ contract would be priced at approximately $0.30, meaning that the market thinks there is a 30% chance it won’t happen. These prices will fluctuate in real-time based on trading activity or new information.
However, pricing in event contracts is not purely a reflection of statistical likelihood, because it’s also shaped by market sentiment and trading volume.
You can consider how prediction markets work here.
In general, though, higher probability events cost more to buy but offer smaller potential returns, while lower probability events are cheaper but generate larger profits if successful.
Executing a trade involves selecting your position (Yes or No) and determining your investment amount. Our platform will show you the current price and calculate your potential profit before you commit. For example, buying 100 ‘Yes’ contracts at $0.60 each will cost $60.
You’ll also be able to see real-time pricing updates and order book information, allowing you to see market depth and any recent trading activity.
You can also choose between market orders for immediate execution or limit orders to buy at a specific price (as a rule, a limit order will leave you with a price you select but comes with a risk of missing the trade if the limit fails to be hit).
Once you confirm your trade, the contracts will be added to your portfolio where you can monitor their performance and current market value.
After the event occurs, contracts are resolved based on the predetermined criteria and verified outcome. Correct contracts are worth $1 per contract, while losing contracts expire worthless.
Using the previous example, if you bought 100 ‘Yes’ contracts at $0.60 and the event occurs, you’ll receive $100 (100 contracts × $1), yielding a $40 profit on your $60 investment (less fees).
Resolution should happen after the event concludes, with potential profits processed automatically. We use official sources and clear resolution rules to determine the outcome, ensuring transparent settlements.
However, on rare occasions, some events may require additional verification time, particularly when the result is uncertain (for example, where a political election result is subject to legal challenges or a recount).
Here are three real world scenarios showing how event contracts operate across different categories:
‘Will the Federal Reserve raise interest rates at the next FOMC meeting?’
Leading up to a Federal Reserve meeting, let’s assume that this contract trades at $0.80 for ‘Yes’ and $0.20 for ‘No,’ indicating strong market expectations for a rate hike. Again, this pricing will shift depending on factors like economic data announcements, the central bank’s communications and inflation reports.
But if you disagree with the consensus and predict rates will remain unchanged or might even be cut, you could purchase 100 ‘No’ contracts at $0.20 each, costing you $20. If the Fed doesn’t hike rates, your contracts become worth $100, generating an $80 profit (less fees).
This type of financial event, with clear outcomes and a broader market impact, makes it easier for newcomers with a baseline understanding of traditional assets to grasp how event contracts work.
‘Will Team A win the Championship?’
Let’s say that during the playoff season this contract is priced at $0.25 for ‘Yes’ and $0.75 for ‘No,’ reflecting a 25% market probability. This pricing will fluctuate throughout the playoffs based on their performance, injuries and other sporting-specific factors.
If you predict that Team A has a better chance than the market consensus suggests, you could buy 200 ‘Yes’ contracts for $50 (200 × $0.25). If they go on to win the Championship, each contract pays out $1, returning you $200 in total, consisting of your initial $50 investment and a $150 profit (less fees).
However, if they lose, your contracts expire worthless and you’ve lost $50.
‘Will Candidate B win the Presidential election in 2028?’
Assuming a competitive election, this contract might be priced at $0.55 for ‘Yes’ and $0.45 for ‘No,’ suggesting a close contest. As campaigns develop, polling data comes out and debates get televised, the probability will likely shift significantly, either way.
But if you purchased 150 ‘Yes’ contracts at $0.55, your cost would be $82.50. If Candidate B then went on to win, you’ll receive $150 (150 × $1.00), earning a $67.50 profit (less fees).
Together, these examples illustrate how event contracts transform knowledge and opinions into trading opportunities, where success potentially depends on accurately assessing probabilities and identifying market inefficiencies where your insights differ from collective sentiment.
Event contracts offer several advantages that make them attractive to all kinds of traders seeking alternatives to the traditional financial markets:
As with all financial products, event contracts come with several risks to consider:
Event contracts differ fundamentally from traditional trading instruments, offering a straightforward approach:
Check out OG.com for more prediction markets:
Pro Football Prediction Markets
Pro Basketball Prediction Markets
College Basketball Prediction Markets
Important information: This content is for informational purposes only and does not constitute financial advice. Event Contract 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.
