Boolmarket — prediction markets

Boolmarket — prediction markets | boolmarket.xyz

A prediction market contract pays out at 0 or 100 when its event resolves, and the price in between tells you what the crowd currently thinks the odds are. This guide walks you through reading a contract page, understanding the expiry payout, and following the documented milestones of these markets.

boolmarket.xyzPrice = crowd's probabilityExpiry pays 0 or 100

Key figures

Key figures for reading a binary prediction market contract
Item	Value	What it means
Lower price bound	0%	Contract resolves false; holder receives nothing.
Upper price bound	100%	Contract resolves true; holder receives full payout.
Price as probability	0–100	The number between the bounds is the crowd's live estimate.
Earliest documented bet	1503	A bet on the papal successor, already old at the time.
Wall Street election betting	1884	Documented by economic historians Rhode and Strumpf.
Iowa Electronic Markets	1988	One of the first modern electronic prediction markets.
HedgeStreet CFTC approval	2004	First designated contract market after the 2000 Act.
Policy Analysis Market	2003	Pentagon program canceled after public backlash.

Key figures for reading a binary prediction market contract

Figures and diagrams

Charts and schematics on this page illustrate the settlement rule and the price-as-probability reading.

The documented milestones

The key terms of this guide, drawn to one scale

What does the price between 0 and 100 tell me?

The price reads as the crowd's current probability that the event will happen.

In a binary prediction market the contract expires at the price of 0 or 100 percent, and every price in between is a live probability estimate. If a contract trades at 62, the market is currently pricing roughly a 62 percent chance that the event resolves true.

The economic theory behind this reading is the efficient market hypothesis: as traders with different beliefs trade contracts whose payoffs relate to the unknown future outcome, the price aggregates their views into a single number.

The concept of crowd-aggregated probability is championed in James Surowiecki's 2004 book The Wisdom of Crowds and Cass Sunstein's 2006 Infotopia. The price moves whenever new information arrives or a trader with a stronger belief takes the other side.

A rising price means more traders now believe the event is likely.

A falling price means the crowd is revising the odds downward.

At expiry the contract settles at 0 or 100 with no middle ground.

The record, step by step

What do I get at expiry?

A binary contract pays either 0 or 100 percent when the event resolves.

The most common form of a prediction market is a binary option market, and it expires at the price of 0 or 100 percent. There is no partial payout: the contract resolves fully true or fully false.

What you paid in sets your return. Buying at 40 and resolving at 100 returns the spread; buying at 40 and resolving at 0 returns nothing. The price you enter at is therefore both your implied probability and your risk.

Between purchase and expiry the price fluctuates as other traders act, so you can close a position before the event resolves. The 0-or-100 settlement only applies if you hold to expiry.

Enter at price P: you are staking on the event resolving true above P.
Hold to expiry: payout is 100 if true, 0 if false.
Exit early: you sell at the current market price instead.

What moves the price?

Traders with different beliefs trade against each other, and their combined flow moves the number.

Traders with different beliefs trade contracts whose payoffs relate to the unknown future outcome, and it is this disagreement that generates liquidity. A trader who thinks the true odds are 70 will buy from a trader who thinks they are 50, and the price ticks up.

News about the underlying event is the other major driver. Because the payoff ties directly to the outcome, any credible update shifts the crowd's estimate and the price follows.

Because the price is an aggregated probability, it can move sharply on thin volume. Reading a contract therefore means reading both the number and the flow behind it.

How far back does this go?

Documented political betting dates to 1503, and Wall Street election betting to 1884.

One documented early political bet dates to 1503, when people bet on who would be the papal successor, and it was already considered an old practice then.

According to economic historians Paul Rhode and Koleman Strumpf, election betting in Wall Street dates back to 1884. The habit of pricing political outcomes with money is therefore centuries old, not a digital invention.

One of the first modern electronic prediction markets is the University of Iowa's Iowa Electronic Markets, introduced during the 1988 US presidential election. Electronic exchanges, regulatory approvals and canceled government experiments all follow from that starting point.

1503: a documented bet on the papal successor.
1884: election betting on Wall Street documented by economic historians.
1988: the Iowa Electronic Markets launch during a US presidential election.

Common questions from readers

What does a price of 55 actually mean?

It means the crowd currently estimates a 55 percent chance the event resolves true. The number is an aggregated probability, not a promise.

Do I lose everything if the event resolves false?

If you hold to expiry, a false resolution pays 0. You can exit earlier by selling at the current market price.

Is this legal where I live?

Many governments consider prediction markets gambling and some locations ban them. Check the legal status in your jurisdiction before participating.

Are these markets new?

No. A documented political bet dates to 1503, Wall Street priced elections from 1884, and electronic markets began with the Iowa Electronic Markets in 1988.