How to Calculate Implied Odds From Prediction Market Prices
A contract trading at 63 cents is telling you something close to a 63% probability. The conversion is simple — the adjustments that make it honest are where most people stop too early.
The basic conversion
Binary event contracts settle at $1 if the event happens and $0 if it does not. Because the payout is exactly one dollar, the price is already the probability, just expressed in cents. A share trading at $0.63 implies roughly a 63% chance.
Formally: implied probability = price ÷ maximum payout. With a $1 payout the division is trivial, which is what makes these contracts so readable compared with traditional odds formats.
Translating into odds formats
To decimal odds, divide 1 by the implied probability: a 63% chance is 1 ÷ 0.63 ≈ 1.59. To conventional fractional odds, the ratio of failure to success: (1 − 0.63) ÷ 0.63 ≈ 0.59, or roughly 4-to-7 against.
These conversions matter mainly when you are comparing a prediction market against a sportsbook or another quoting convention. Within a single venue the cent price is the cleanest representation.
Use the mid, not the last trade
The last traded price can be stale, or it can be the residue of a single impatient order. The more reliable estimate is the midpoint between the best bid and the best ask.
When the spread is wide, the mid is genuinely uncertain and you should treat the implied probability as a range rather than a point. A market quoted 58 bid / 66 ask is not telling you 62% — it is telling you somewhere between 58% and 66%, and that the market does not have a confident view.
The overround, and why the two sides rarely sum to 100
Add the Yes price and the No price on a healthy binary market and you will usually get slightly more than $1.00. That excess is the overround — the spread the market makers earn for providing liquidity.
To recover a cleaner probability estimate, normalise: divide each side by the sum of both. If Yes trades at 0.64 and No at 0.38, the sum is 1.02, and the normalised implied probability is 0.64 ÷ 1.02 ≈ 62.7%.
What the number does and does not mean
An implied probability is the market's price, not a guarantee, and not the output of a model. It is the level at which buyers and sellers with money at stake stopped disagreeing.
It is also a snapshot. A 70% reading that has held steady for a month on heavy volume carries far more information than a 70% that appeared yesterday on a handful of trades. Price alone does not distinguish the two — you have to look at volume, depth and how the odds have moved.
See implied probabilities across dozens of live markets at once — already converted, ranked by volume, and plotted against 7-day momentum.
See where the crowd stands now →Quick answers
How do I convert a prediction market price to a percentage?
Divide the share price by the $1 settlement value. A contract at $0.63 implies about a 63% probability, because the contract pays exactly one dollar if the event occurs.
Why don't the Yes and No prices add up to exactly $1?
The small excess is the overround — the spread earned by liquidity providers. Normalise by dividing each price by the sum of both sides to recover a cleaner probability estimate.
Should I use the last traded price or the bid-ask midpoint?
The midpoint is generally more reliable. A last trade can be stale or reflect one impatient order, whereas the mid reflects where the market is currently willing to transact.