Odds and trading cost

Prices range between 0–1 and reflect implied probabilities. Trading costs include spreads and platform fees.

In Bayes Market, prices and costs aren’t just numbers—they’re signals. Understanding how odds and trading costs work is essential to making smart predictions.

Odds = Market-Implied Probability

Each outcome in a prediction market has a price between 0 and 1, representing the collective belief about its probability.

A price of 0.70 means the market thinks there’s a 70% chance this event will happen.

If you buy at 0.70 and the outcome resolves in your favor, you earn 1.00, making a net profit of 0.30.

If you’re wrong, you lose the 0.70 you staked.

Odds are dynamic—prices change as users buy and sell, reflecting real-time updates in crowd belief.

Bayes is powered by an Automated Prediction Market Maker (APMM), which determines prices and provides liquidity. This creates some natural costs to trading:

• Bid-Ask Spread: The price to buy may be slightly higher than the price to sell—this difference is your spread cost.

• Platform Fee: A small fee (e.g., 1–2%) may be applied to profits to support the protocol.

• Slippage: Large trades can move the market price, increasing your cost if liquidity is shallow.

The earlier or more contrarian your prediction, the more potential upside—but also the more risk.

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