Prediction Markets Converter

Prediction markets are exchanges where participants trade contracts tied to real-world events. Each contract pays out $1 (or 100 cents) if the event occurs, and $0 if it does not. The trading price of a contract directly reflects the market's collective estimate of the event's probability.

For example, if a "Will Team X win the championship?" contract trades at 65 cents, the market implies a 65% probability of that outcome. Unlike polls or expert forecasts, prediction markets harness the "wisdom of crowds" — participants have real money at stake, incentivizing accurate probability estimates.

Major platforms include Polymarket (crypto-based, global), Kalshi (CFTC-regulated, US), and PredictIt (academic, US, capped at $850 per contract). Each has different fee structures, liquidity levels, and regulatory environments that affect effective pricing.

Platform fees significantly affect your effective odds and break-even probability. PredictIt charges a 10% fee on profits and a 5% fee on withdrawals, which substantially raises the true cost of each position. A 60-cent YES contract does not actually give you 60% implied probability once fees are factored in.

With PredictIt's fee structure, a winning YES position at 60 cents yields a gross profit of 40 cents. After the 10% profit fee (4 cents) and 5% withdrawal fee on total proceeds (~4.8 cents), your net return drops meaningfully. The effective implied probability is higher than the raw price suggests.

Polymarket and Kalshi currently charge minimal or no trading fees on most markets, though this may change. Always factor in the specific platform's fee structure when comparing prices across platforms or against sportsbooks. This converter automatically accounts for PredictIt fees when that platform is selected.

Prediction markets and sportsbooks often price the same events differently. Sportsbooks bake in a margin (vig/juice) across all outcomes, typically 5-15% overround. Prediction markets, being exchange-based, usually have tighter spreads but may have lower liquidity and different participant profiles.

Sportsbooks are run by professional oddsmakers who adjust lines based on sharp money, liability management, and proprietary models. Prediction markets are driven by a diverse crowd including political junkies, finance professionals, and casual bettors — each bringing different information.

The discrepancy between these two pricing mechanisms creates opportunities. If a prediction market prices an outcome at 55% but the equivalent sportsbook line implies 48%, there is a 7% edge to exploit. Sophisticated bettors monitor both markets simultaneously to identify and capitalize on these discrepancies.

The most profitable strategy in cross-market analysis is identifying persistent discrepancies between prediction markets and sportsbooks. These arise from information asymmetry, different participant pools, regulatory constraints (PredictIt's $850 cap limits sharp money), and timing differences in how quickly each market reacts to news.

True arbitrage — guaranteed profit regardless of outcome — is rare but does occur, especially around major events when sportsbook lines lag prediction market moves. More commonly, you will find "soft" edges where one market is mispriced by 3-8%. These edges require judgment about which market is more accurate.

Key tips: Monitor prices at the same time across platforms. Account for ALL fees before declaring an edge. Remember that prediction market prices can be distorted by position limits, low liquidity, or a single large trader. Sportsbook lines, being professionally set, are often (but not always) more accurate. Use this converter to quickly quantify discrepancies and make informed decisions.