How Binary Markets Work
Every binary market poses a yes-or-no question with specific resolution criteria:- “Will Candidate X win the election?” → YES or NO
- “Will Bitcoin reach $100,000 by December 31?” → YES or NO
- “Will Company Y release Product Z in Q1?” → YES or NO
- YES shares pay $1.00 each if the market resolves to YES
- NO shares pay $1.00 each if the market resolves to NO
The Relationship Between YES and NO
YES and NO prices are mutually exclusive. If you hold one YES share and one NO share, you’re guaranteed to receive exactly $1 when the market resolves (one pays $1, the other pays $0). If YES is priced at $0.40, NO should be approximately $0.60. Prices may not sum to exactly $1.00 due to spreads.Market Resolution
Event Occurs (or Deadline Passes)
The real-world event specified in the market either happens or the deadline for it to happen passes.