Prediction Market Order Books
Read bid, ask, midpoint, spread, depth and imbalance for outcome tokens.
Build the mental model first.
The headline probability hides executable sides and available size. The order book shows how much belief can actually trade near the displayed coordinate.
Read bid, ask, midpoint, spread, depth and imbalance for outcome tokens.
Now make it exact.
Notation and units
Decimal rates and volatilities, year-fraction time and continuous compounding unless stated otherwise.
Every model has a price.
Educational conventions are stated explicitly and may simplify market quotation or settlement details.
Rates are continuously compounded unless the section says otherwise.
Inputs are deterministic in the base model.
“An unstated convention is a future reconciliation break.”— THEQUANTBATEMAN
Why a quant cares.
Liquidity diagnostics, event monitoring, transaction-cost context and stale-price detection.
The hedge has opinions.
Start with the quote convention, then ask which Foundations risk survives the hedge. A number without its convention is merely well-dressed ambiguity.
Ask Bateman about this model →