Prediction Market Resolution and Negative Risk
Connect settlement rules, oracle resolution and linked mutually exclusive markets.
Begin with the executable market object.
A contract is only as precise as its resolution rule. Negative-risk events link multiple mutually exclusive binary markets, so a single YES/NO label does not describe the full event.
Connect settlement rules, oracle resolution and linked mutually exclusive markets.
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.
Resolution-risk review, event aggregation and correct interpretation of multi-outcome structures.
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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