Event Trading Explained: How To Trade Contracts On Events

Prediction market sites have opportunities all year for you to engage with popular events. Whether you follow celebrities, sports, politics, or a combination of all three, you will find that this guide helps to set things up.

As you read on, you will discover all you need to know about event prediction markets. This includes a look at how they work, the legal situation, and a breakdown of expected probability and its importance. We then offer insight into the most popular event prediction markets and detail how we compare the very best sites for you.

Event Trading: How Do Event Prediction Markets Work?

Event prediction markets allow you to open positions (futures contracts) on upcoming events. The idea is that you will join a live market and decide whether you agree with a particular statement (“yes”) or disagree (“no”).

For instance, ahead of the upcoming World Cup (sports event), you may find a statement like ‘Brazil will win the World Cup’. At market open, you may find it split 50/50. If so, both Yes and No will be displayed as $0.50 or 50%. Of course, this will change rapidly in response to market movements, breaking news, and other insider information.

As the markets fluctuate, you will find that market entries rise and fall in price. If there is a clear lean towards a Brazil win, you could see the price of opening a “Yes” contract increase to $0.70. This means that there is a 70% expected probability of this statement coming true.

The difference between this entry price and $1 is what you can expect to win with each open contract. In essence, for every $0.70 you enter, you will have the potential to add $0.30 per contract. If your prediction is incorrect, you’ll find that your open contracts turn to zero.

It is also worth noting that there is no legal ambiguity when it comes to event prediction markets. As these types of sites are governed by the Commodity Futures Trading Commission (CFTC) – rather than state-specific regulators – you’ll find that prediction markets are legal throughout the US.

Categories and Markets That You Can Expect at Event Prediction Sites

As a relatively new concept, we are sure that some of you will still be getting your head around what a prediction market is. We hope that our quick explainer has been sufficient in setting the foundations for you, so now let us focus on the specific categories and prediction markets available.

With sportsbooks, you will find that possible bets are split into categories, sports, and individual betting opportunities. With event prediction sites, you will find that they take a similar approach; however, you will instead see a broader category with a number of statements offering a Yes/No option.

We recently reviewed Kalshi vs Robinhood, comparing the most popular event prediction markets and categories, and this is what stood out.

Opening a Contract at a Prediction Market: A Step-by-step Guide

Opening a Yes or No contract on an event is pretty straightforward; however, it still requires you to follow a few basic steps. Here’s a quick guide to help you open your first contract on an upcoming event.

1. Make use of our comparisons: To begin, you will want to make the most of our reviews on the best prediction market sites.
2. Register your account: Work your way through the sign-up process, verifying your details, and passing Know Your Customer (KYC) checks before funding your account
3. Choose an event: Pick an event that interests you and you know a lot about, such as a reality television show, sports, or politics.
4. Analyze the probability: Research the market and various factors that can influence the outcome, such as previous performance, injuries, interviews, news, and so on.
5. Enter the market: Find the right moment to open a Yes or No contract at your preferred prediction market site.
6. Wait for the results: Watch the event unfold. You can wait for the results to come in or pull out of the market early based on movement

Comparing Sites Based on Event Prediction Markets

Now that you have the basics on event prediction markets down, you should be ready to start looking for the best sites for you. To help you with this, you can tap the promotional banners on this page to find our list of recommended sites.

Before you do, take the time to read through this guide, however, we have taken a moment to highlight a few key features that you should keep an eye on:

• • Available Events – You should look at the complete list of events the site covers to make sure it aligns with your preferences.
  • Fees – All prediction sites will have a fee structure in place. Some will charge a fee per open contract, deposit, withdrawal, or a combination of all three.
  • Support: Should you run into any issues, you will want to feel certain that all is resolved before your contract ends. Rest assured that we leave no stone unturned – or support agent untested – in this section of our reviews.
  • Promotions – You will find a variety of bonuses at top prediction market sites; however, this is not a guarantee. They may be offered as a way to welcome you on-site, but you must make sure you look at the specifics before claiming.

Conclusion: Find Your Favorite Events Covered at Top Prediction Market Sites

Event prediction markets provide a diverse yet straightforward approach to futures markets, offering something for everyone. Whether you have your sights on the next World Cup winners, Golden Globe nominees, or something in between, all of this and more is available.

What Are Event Prediction Markets? FAQs

• 🎲 What’s the best site for event prediction markets?
  There is much to consider before joining a prediction market site. However, you will find our latest recommendations within the banners on this page.
• ❓ What types of event prediction markets can you find?
  Event prediction markets are split into various categories, including sports, film, politics, and entertainment. Within each of these categories, you could find statements on all types of events, including the Golden Globes, the UEFA Champions League winners, and this year’s Christmas number one.
• 🔍 How many event prediction markets can you enter at one time?
  This will all depend on the event prediction site that you opt to join; however, provided the liquidity is there, you shouldn’t find any higher limits in place. Of course, the minimum will usually be one contract, based on the value of the Yes/No contract and fees.