What is implied probability?

The idea is older than crypto. Sportsbook odds, options prices and interest rate futures all hide a probability, and rate futures are how traders read the market's expected path for Fed rates. A $1 event contract makes the conversion trivial: the price in cents is the percentage.

The raw price is only a rough probability. Spreads and fees push Yes plus No a little above $1, and money locked up until a far-off resolution date wants paying for. One large order can shove a thin market around. And people buy long shots for fun, so unlikely outcomes tend to trade rich. Economists call this the favorite-longshot bias, and horse racing bettors have lived with it for decades.

Comparing venues helps. If one platform has a question at 55 percent and another at 62, the fair number sits somewhere between them. A gap that stays open for days usually means the two markets are asking different questions.

Say Yes asks 58 cents and No asks 45. Together that is $1.03, a 3 cent overround. Divide 0.58 by 1.03 and you get about 56 percent, a bit under the sticker price.

Also called: market-implied odds, implied odds.

The Prediction markets widget turns prices into percentages. The leading outcome gets one decimal under 0.5 percent or at 99.5 and above, and everything else is rounded to whole numbers. The Kalshi figure is the midpoint between the best Yes bid and ask, or the last trade when the book is one-sided, and its No is 100 minus Yes, so there is no overround to strip out. When both venues list the same question, you can read the gap straight off the list.

• Prediction markets

• Prediction markets
• Polymarket
• Kalshi
• Event contracts