Every market keeps a live list of offers. Traders call this list the order book.<\/p>\n\n\n\n

How buyers and sellers get matched<\/h3>\n\n\n\n

Say you want to buy a contract at 60 cents. First, you post that order. Then the exchange looks for someone willing to sell at 60 cents or less. If it finds a match, your trade fills instantly. If not, your order simply sits in the book until someone takes it.<\/p>\n\n\n\n

So nobody sets the odds for you. Instead, the price emerges from what other people will accept.<\/p>\n\n\n\n

Why the spread matters more than you think<\/h3>\n\n\n\n

Every book shows two prices. The highest price a buyer offers is the bid. Meanwhile, the lowest price a seller accepts is the ask. That gap between them is the spread.<\/p>\n\n\n\n

That gap costs you money. For example, if the bid sits at 58 cents and the ask sits at 63 cents, you buy at 63 and could only sell at 58 right away. Therefore, you start every trade slightly behind.<\/p>\n\n\n\n

Busy markets have tight spreads. Quiet markets have wide ones. As a result, thin markets are usually worse value than they first appear.<\/p>\n\n\n\n

How Prediction Market Pricing Changes Over Time<\/h2>\n\n\n\n

Prices move because people trade. Nothing else moves them.<\/p>\n\n\n\n

Imagine a contract on a central bank holding interest rates. It trades at 70 cents. Then a surprise inflation number lands. Traders who now expect a cut start selling. Meanwhile, buyers only step in at lower prices. Within minutes, the contract might trade at 45 cents.<\/p>\n\n\n\n

That new price reflects a new collective estimate: roughly a 45 percent chance. In short, the market re-forecasts itself continuously, one trade at a time.<\/p>\n\n\n\n

You can also sell before the event happens. Because of that, you can lock in a gain or cut a loss without waiting for the outcome.<\/p>\n\n\n\n

How Prediction Market Settlement Works<\/h2>\n\n\n\n

Settlement is the part most guides skip. Yet it decides whether you actually get paid.<\/p>\n\n\n\n

What happens when an event resolves<\/h3>\n\n\n\n

Every contract names its resolution source in advance. That source might be a Statistics Canada release, a central bank announcement, or an official exchange price. Once the source publishes, the exchange settles the contract automatically.<\/p>\n\n\n\n

Winners receive one dollar per contract. Losers receive nothing. Then the market closes.<\/p>\n\n\n\n

How exchanges handle disputes<\/h3>\n\n\n\n

Sometimes reality gets messy. A data source revises a number, or an event ends ambiguously. Each exchange therefore publishes a rulebook that explains how it resolves these cases.<\/p>\n\n\n\n

Read that rulebook before you trade anything unusual. After all, the rulebook decides the outcome, not your interpretation of the news.<\/p>\n\n\n\n