Learn to trade prediction markets properly
I've traded for a living for years, and if a friend asked me where to start with prediction markets I'd tell them that a price is just a probability with money attached to it. Most of what I do is read that number, set my own next to it and then decide how much to put on, or whether to bother at all (more often than you'd think, the answer is no). That's what these courses teach, and you'll practise it here on simulated markets first so the early mistakes cost you nothing.
The course
I'm writing the nine modules one at a time and putting each one up as soon as I'm happy with it, which means the first is open now and the rest will follow over the coming weeks. Every module finishes with a few exercises that you can check against the practice board.
Prices are probabilities
I'd start here. When a contract trades at 63¢ the market is telling you it thinks 63%, and once that clicks you'll see why the Yes and No prices nearly always add up to a little more than 100.
Fees, spreads and your real break-even
The number on the screen isn't quite the number you pay, and I'll show you how I work out the probability I really need once the fee and the spread come off (it's where I see most beginners lose money without ever noticing).
Expected value and your own forecast
You need your own number before a price means anything to you. This is how I turn a view into that number and then decide whether a small edge is worth the bother.
How much to put on
I'll derive the Kelly criterion with you and then explain why I, like most traders, only ever bet a fraction of it. Being right doesn't help much if a bad week wipes you out first.
Arbitrage and where it breaks
Two venues pricing the same event differently looks like free money. Usually it isn't, since the settlement wording or the timing is slightly different, and I'll show you how to check before you trust the gap.
Making markets
Here you quote both sides and get paid the spread for holding risk you didn't choose. I'll cover how I'd manage the position that builds up while you're doing it.
Esports markets
Best-of-three and best-of-five series have tidy maths behind them. Once you know it you can tell when a live price after the first map has moved too far or not far enough.
Keeping score
Calibration and the Brier score are how you find out if your forecasts are any good. A month of honest scoring will teach you more than a lucky streak ever does.
The simulation engine
This is a full season of simulated markets against the clock, fees included, so you can see what your process does over hundreds of trades before real money is involved.
Practise before it costs you
Every market on the board above is simulated. If you click Yes or No you'll get a practice ticket showing how many contracts your stake buys and what they'd pay if you're right, along with the expected value at your own probability. I'd much rather you build the habit of checking that number here, where it's free, than learn it with real money.
Learn how the ticket worksHow a ticket reads
| Price | 40¢ for Yes |
|---|---|
| Your forecast | 50% |
| £100 buys | 250 contracts |
| Pays if Yes | £250 |
| Expected value | +£25 before fees |