What is a prediction market?
A prediction market is a market built around a question about a future event. Instead of buying part of a company, you buy shares in possible answers.
Markets on Juhus have two answers: YES and NO. Each market states what must happen for YES to be correct, which source will be used, and which event or time period counts.
For example, imagine a market asking:
Will Tallinn reach 25°C on 1 August?
The market rules would identify the official weather station, the measurement to use, and the time period that counts. Those details matter. A similar-sounding result from another source would not change how the market is resolved.
What a share represents
A share is a claim on the market’s final payout:
| Share | What you are saying | Payout if correct | Payout if incorrect |
|---|---|---|---|
| YES | The event will meet the YES rules | €1 | €0 |
| NO | The event will not meet the YES rules | €1 | €0 |
If you buy YES shares, you benefit if the market resolves YES. If you buy NO shares, you benefit if it resolves NO.
When a market resolves YES or NO, only the correct side receives the full €1 payout. The market’s written resolution rules determine which side is correct. An unusual or ambiguous result may use a custom payout instead, as explained in Orders, closing, and resolution.
Why shares have a price
You do not pay €1 for a share. You trade it at a price between 1 cent and 99 cents.
Suppose YES shares in the Tallinn weather market trade at 58 cents. That price can be read as an implied probability of roughly 58%. It reflects the prices traders are currently willing to accept, not a fact or a guarantee.
If new information changes people’s expectations, they may offer to buy or sell at different prices. The prices available on screen can change as offers are added, accepted, or cancelled.
A complete example
Suppose you buy 10 YES shares at 58 cents each:
- The shares cost €5.80 before any applicable fee.
- If the market resolves YES, they pay €10 in total.
- If the market resolves NO, they pay €0.
- You can also sell some or all of the shares before resolution if another trader is willing to buy them.
Your return depends on the price you paid, the price at which you later sell, or the final market result. Fees can reduce a profit or increase a loss.
A market price is not a prediction you can rely on
A price brings together the views and trading decisions of market participants. It can be useful information, but it can also be wrong. A 58% price does not guarantee that the event will happen, and it does not promise a profitable trade.
Before trading, check:
- The exact question.
- The resolution rules and source.
- The price and estimated total shown before confirmation.
- How much you could lose if your side is incorrect.