In this guide
What Is a Prediction Market?
Prediction markets are financial platforms where traders exchange contracts tied to the results of forthcoming occurrences. The contract's market price embodies the aggregated likelihood assessment of that event taking place. PolyGram operates as a UK-based prediction market offering exposure to international events.
How Do Prediction Markets Work?
Every prediction market contract poses a straightforward question: will Event X occur by Date Y? Consider this illustration: "Will the Labour Party secure victory in the forthcoming UK general election?" Two contract types exist for trading:
- YES: Should Labour prevail, this contract settles at $1.00
- NO: Should Labour fail to prevail, this contract settles at $1.00
When the YES contract trades at $0.65, traders collectively assess Labour's winning probability at 65%. You may purchase YES if you believe the outcome more probable, or NO if you expect otherwise. Correct predictions yield gains; incorrect ones result in losses on your investment.
Prediction Markets vs Traditional Betting
- Absence of overround: Traditional bookmakers embed a profit margin — prediction markets eliminate this. YES and NO prices combine to approximately $1.00
- Early exit available: Close out your position whenever you choose, prior to final settlement
- Full visibility: Market participants access all pricing information and order book details openly
- Distributed intelligence: Contract valuations synthesise insights from vast trader networks — frequently surpassing conventional election forecasting methodologies
Types of Prediction Markets
Political Markets
Campaign races, public sentiment measures, legislative decisions, ministerial transitions. These dominate trading activity and liquidity across major platforms including Polymarket.
Sports Markets
Game results, championship victors, athlete performance benchmarks, divisional standings.
Crypto Markets
Digital asset valuations, blockchain protocol developments, fund approvals, government intervention scenarios.
World Event Markets
Labour statistics, climate events, technological breakthroughs, awards ceremonies.
Are Prediction Markets Legal in the UK?
The regulatory status of prediction markets within the United Kingdom remains ambiguous. The Gambling Commission has neither formally authorised nor explicitly prohibited them. Operators such as PolyGram function via distributed ledger technology for settlement, distinguishing them from conventional gaming activities.
How Accurate Are Prediction Markets?
Empirical evidence demonstrates that prediction markets consistently outperform specialist analysts and survey-based forecasts. Polymarket's assessments proved correct regarding the 2024 US election, numerous contests across the European continent, and significant blockchain-related developments, frequently months in advance.