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SVPulse · Prediction markets

Prediction market analysis

Also called: event contract analysis, prediction market research

Prediction market analysis reads the prices of event contracts as crowd probabilities and checks them for liquidity, resolution rules and bias.

Definition

A prediction market lists contracts that pay a fixed amount, typically one unit, if a defined event happens and nothing otherwise, such as a central bank cutting rates at its next meeting. Prediction market analysis is the practice of reading those prices as probabilities and judging how much weight they deserve.

It covers the contract terms, the quality of the market (depth, spread, participation) and how prices move as information arrives.

Intuition

If a contract paying 1 trades at 0.35, buyers and sellers in aggregate are pricing the event at roughly 35%. Because participants put capital behind their views, these prices often react quickly to new information and can complement polls, surveys and economist forecasts.

For market analysis, event probabilities are useful context: a shift in the priced odds of a policy decision can explain moves in rates, currencies or volatility, and the reverse.

How it's calculated

Core quantities for a binary contract paying 1:

  • Implied probability: p ≈ mid = (best bid + best ask) / 2.
  • Spread: ask − bid, a measure of uncertainty about the fair price and of trading cost.
  • Depth: size available near the mid; a thin book means one participant can move the price.
  • Time to resolution: capital is locked until the event resolves, which affects how far prices can drift from true probabilities.

Across related contracts, check coherence. Mutually exclusive outcomes should have prices summing to about 1, and a contract for "by June" should not trade below the same event "by March".

How to read it

Weight a price by the market behind it. A probability backed by deep, active trading over weeks is more informative than one set by a handful of trades. Read the resolution rules carefully: the contract pays on the stated criteria, which may differ from the headline question.

Watch large position changes and the path of the price around scheduled information, not just the latest number.

Example: a contract quoted 0.62 bid and 0.66 ask implies about 64%, with at least two percentage points of uncertainty from the spread alone, before any adjustment for fees.

Common mistakes

  • Treating a thinly traded price as a consensus probability.
  • Ignoring fees, spreads and capital lock-up, which keep prices away from true probabilities, especially near 0 and 1.
  • Skipping the resolution criteria and assuming the contract means what its title suggests.
  • Reading one large position as informed money rather than as a hedge or a single view.

In Saqrid

SVPulse's Probability Bridge lists odds from prediction markets on macro and geopolitical events.

Its Whale Tracker shows large recent prediction-market positions with side, odds and size, and Crisis Monitor follows news and prediction markets on watched geopolitical topics and flags when one escalates.

Open SVPulse.

  • Prediction market odds as probabilitiesA prediction market price can be read as an implied probability, but spreads, fees, overround and longshot bias mean it needs adjusting first.
  • Economic catalyst calendarAn economic catalyst calendar lists scheduled market-moving events, such as FOMC decisions, CPI, PCE and payrolls releases, and options expirations.
  • Market volatility gaugeA market volatility gauge combines several standardized stress measures, such as implied volatility, correlation and spreads, into one composite reading.
  • Shipping chokepoints and market riskShipping chokepoints are narrow sea passages carrying a large share of world trade and energy; disruption there can move oil, freight and inflation views.

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