Understanding Markets
By Mujahid
What is a market?
A market is a question about a real-world event that ends in Yes or No, such as "Will Arsenal beat Everton?". You buy shares in the answer you think is right, and each share of the right answer pays ₦100 when the market resolves.
Some events hold several markets, one per possible winner, such as one for each candidate in an election. Only one of them can resolve Yes.
What do Yes and No mean?
Yes means you think the event in the question will happen. No means you think it won't. Some markets name the two sides differently, such as a team's name, or Up and Down for a price.
What does a share's price mean?
A share costs between ₦1 and ₦99, and its price is the market's view of how likely that answer is. A Yes price of ₦70 reads as a 70% chance, and the market page shows both.
If you buy Yes at ₦70 and the market resolves Yes, you get ₦100 for each share, so ₦30 more than you paid. If it resolves No, you get nothing for them.
How is a price set?
By the orders people place. A buyer and a seller agree on a price when their orders match, and the price moves as people buy and sell.
What are a market's rules?
The rules say exactly what makes the market resolve Yes or No, by when, and which source decides it. They sit under Rules on the market page, with the sources the market uses.
The market resolves by the rules on its page. If we correct a mistake in them, the page shows the corrected rules. Read them before you trade.
What is a verification source?
The source the rules name for checking the result, such as a league's official site, an election commission, a company announcement or a price feed. It is listed under the rules.
What is the resolution date?
The date and time by which the result is expected to be known. You'll find it under Timeline and payout on the market page, with what a winning share pays and the trading fee.
What does it mean when a market is closed?
Trading has stopped and you can't place new orders, but your shares stay yours until the market resolves. A market usually closes before the event starts or as its deadline arrives.
A market can also be paused for a while, shown as "Trading paused", and trading resumes when the pause ends.
What is the difference between closed and resolved?
A closed market has stopped trading and is waiting for its result. A resolved market has its result, and winning shares have been paid.
Can a market be voided?
Yes, though it is rare. We void a market when it can't be resolved fairly by its rules, for example when the event is cancelled or abandoned, or the source can't give a result.
What happens when a market is voided?
Every share, Yes or No, pays ₦50. Each Yes share was created together with a No share, and the pair pays ₦100 between them, so a void splits that ₦100 evenly between the two sides.
What you get back depends on what you paid. Shares bought for less than ₦50 return more than they cost, and shares bought for more return less. Orders still waiting to fill are cancelled and their money returned to your balance.