Prediction Markets vocabulary
Talk event markets. 28 hand-written terms with real workplace examples.
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Prediction Market
An exchange where people trade contracts tied to real-world event outcomes, so prices reflect a crowd probability.
Event Contract
A tradable instrument whose payout depends on whether a defined future event happens.
Binary Market
A market with exactly two outcomes, usually Yes and No, that settles at a fixed payout if the winning side is correct.
Implied Probability
The chance suggested by a contract price, such as a Yes share at 0.60 reading as about 60 percent.
Outcome Share
A tradable claim that pays if a specific outcome wins when the market resolves.
Categorical Market
A market with several mutually exclusive outcomes, where each outcome has its own share and only one can win.
Scalar Market
A market whose payout varies with a numeric result, such as a rate level or temperature, not a simple Yes or No.
Resolution Criteria
The written rules that say which source decides the outcome and when the market can resolve.
CLOB
Central Limit Order Book: a matching system where bids and offers rest until they meet by price and time priority.
Limit Order
An instruction to buy or sell at a stated price or better; it rests on the book until filled or canceled.
Maker
A trader who adds resting liquidity with a limit order that does not fill immediately.
Taker
A trader who removes liquidity by hitting a resting bid or offer and filling right away.
AMM
Automated Market Maker: a pricing pool or formula that quotes continuous prices without a traditional resting order book.
Market Maker
A firm or program that continuously quotes buy and sell prices to keep a market tradable.
Order Book Depth
How much size sits on bids and offers near the mid price, showing how much you can trade without large impact.
Contract Spread
The gap between the best bid and best ask on an event contract; a tighter gap usually means easier trading.
Market Resolution
The determination of which outcome won according to the market rules, done before payouts finalize.
Optimistic Oracle
A resolution design that accepts a proposed outcome as true unless someone disputes it inside a challenge window.
Dispute Window
The timed period when participants can challenge a proposed resolution before it becomes final.
Contract Settlement
Paying winning event-contract holders the final payout once resolution is final.
CFTC
Commodity Futures Trading Commission: the U.S. federal regulator that oversees derivatives and event-contract exchanges.
DCM
Designated Contract Market: a CFTC-registered exchange authorized to list and trade contracts for U.S. participants under federal rules.
Commodity Exchange Act
The U.S. federal law that sets the framework for futures, swaps, and related event contracts overseen by the CFTC.
Fully Collateralized
Positions are backed by cash or equivalent up front, so payouts do not rely on leveraged credit from the trader.
Trade Surveillance
Monitoring trading activity to detect abuse, anomalies, and rule breaches for escalation or reporting.
Wash Trading
Trading with yourself or colluding parties on both sides to fake volume or move price without real risk transfer.
Market Manipulation
Intentional conduct that distorts prices, liquidity, or perceived demand to mislead other participants.
Wisdom of Crowds
The idea that many independent judgments, aggregated in a market price, can estimate outcomes well.
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