How to Calculate Implied Odds From Prediction Market Prices

For a $1 binary payout, 63 cents corresponds to 63% implied odds before costs. Quotes and calibrated probabilities are different things.

The conversion

Divide the contract price by its winning settlement value. With a $1 payout, $0.63 / $1 = 0.63, or 63%. Check the payout first: this shortcut does not apply unchanged to scalar contracts or instruments with different settlement values.

Worked example: break-even after costs

Buying 100 contracts at $0.63 costs $63. With a hypothetical $2 total fee and no other costs, you pay $65 for a potential $100 winning payout. In a simple hold-to-settlement calculation, your break-even event probability is 65%, rather than 63%. The fee is an illustrative assumption, not a venue fee quote.

The same 63% input gives decimal odds of 1 / 0.63 ≈ 1.587 and fractional profit-to-stake odds of 0.37 / 0.63 ≈ 0.587. These are mathematical conversions, not another independent forecast.

Bid, ask and midpoint

A Yes book quoted 58 bid / 66 ask has a 62-cent midpoint. A buyer may pay 66 and a seller receive 58, before fees. These are execution prices, not an event-probability confidence interval.

Polymarket documents midpoint display, with last-trade display when the spread exceeds 10 cents. Check its current display rules; do not assume every venue uses the same convention.

Why Yes and No quotes can exceed $1

A pair of executable ask quotes can sum above $1 because of the book’s spreads. Complementary settlement payouts still sum to $1. Separate venue fees from quoted spreads: neither automatically equals a sportsbook’s overround.

Normalising 0.64 and 0.38 gives 0.64 / 1.02 ≈ 62.75%, but this is only a normalisation of the chosen quotes. It does not remove fees, prove fair value, or supply an executable arbitrage.

Compare dated examples on Aiovel’s Economy board, then inspect the original market rules.