A prediction market turns a question about a future event into something people can trade. The question might concern an election, an economic release, or a cultural event. The important part is that the contract defines what counts as an outcome.
Start with the question
A standard binary contract has two sides: Yes and No. Kalshi describes these as event contracts. On Polymarket, shares in the outcome that resolves as correct pay $1 each, while the losing side pays nothing under its standard binary resolution mechanics.
The precise question matters. A contract about whether an announcement happens before a deadline is different from a contract about whether a policy actually takes effect. Similar headlines can describe different contracts.
Why a price looks like a probability
If a standard Yes share costs 60 cents and pays $1 if the event occurs, its price is commonly read as a roughly 60% market-implied probability. That number reflects trading in that particular contract. It is not an independently measured certainty.
For an illustrative example, imagine a contract asking whether a fictional town records rain on a specified day. A 60-cent Yes price tells you how that outcome is being priced. It does not establish that a weather service produced a 60% forecast.
A market is also a set of rules
Read the wording, deadline, settlement source, and exceptions together. Then distinguish the event itself from the process that determines the contract's result. Those details make a market price interpretable.
Prediction Talks starts there: what is being asked, what the number represents, and what evidence will ultimately decide the outcome.