Prediction Market Probabilities
Interpret binary contract prices without treating them as certainty.
Begin with the executable market object.
A YES price resembles an implied probability, but liquidity, fees, risk preferences and market structure can separate it from a calibrated real-world forecast.
Interpret binary contract prices without treating them as certainty.
Make the quote arithmetic explicit.
Notation and units
Decimal rates and volatilities, year-fraction time and continuous compounding unless stated otherwise.
Record venue, timestamp, and convention.
The venue, timestamp, executable side and data status are part of every market observation.
Midpoints and derived probabilities are analytical coordinates, not guaranteed executable levels.
Licensing, freshness and resolution rules determine how the observation may be used.
“An unstated convention is a future reconciliation break.”— THEQUANTBATEMAN
Distinguish observation from inference.
Macro event monitoring and scenario weighting with explicit semantic caveats.
Ask what can actually be traded or hedged.
Start from the executable side and timestamp. Derived Foundations signals are only as reliable as the market state and resolution convention beneath them.
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