Reference

Prediction Market Glossary

A comprehensive dictionary of terms and concepts used in prediction markets. Search or browse by category to find definitions.

1

1099 Form

Tax document reporting trading income.

Tax & Accounting

A

Ambiguous Resolution

When market criteria don't clearly determine an outcome, often resolved as N/A or refunded.

Market Mechanics

Automated Market Maker (AMM)

An algorithmic system that automatically sets prices based on supply and demand without human intervention.

Market Mechanics

Ask (Offer)

An offer to sell contracts at a specified price.

Market Mechanics

All-or-Nothing Order

Order that must fill completely or not at all.

Order Types

Alpha

Returns generated by skill rather than market movements.

Trading

Arbitrage

Simultaneously buying and selling related assets to profit from price discrepancies.

Trading

Active Management

Frequently adjusting positions based on new information.

Trading Strategies

Anti-Martingale

Increasing position size after wins, reducing after losses.

Trading Strategies

American Odds

Odds format using positive/negative numbers (e.g., +150, -200).

Odds Formats

Arbitrage Opportunity

When combined positions guarantee profit regardless of outcome.

Odds Formats

Automated Resolution

Markets resolved programmatically based on API data feeds.

Resolution

Amendment

Official change to market description or rules.

Resolution

AML (Anti-Money Laundering)

Compliance measures to prevent illicit financial activity.

Regulatory

Accredited Investor

Individual meeting wealth/income requirements for certain investments.

Regulatory

Accuracy Bonus

Rewards for correct predictions beyond trading profits.

Incentives & Rewards

Achievement

Specific milestone or challenge completion.

Gamification

Anchoring

Over-relying on initial information when making decisions.

Behavioral Biases

Availability Heuristic

Overestimating likelihood of memorable or dramatic events.

Behavioral Biases

Autocorrelation

Correlation of a series with its past values.

Statistics

Adverse Selection

When information imbalance leads to poor market outcomes.

Game Theory

Adverse Selection Problem

Risk of trading with better-informed counterparties.

Game Theory

Auto-Trading

Automated trading based on predetermined rules.

Execution

Analytics Dashboard

Visual display of performance metrics and trends.

Platform Features

API Access

Programming interface for automated platform interaction.

Platform Features

Alternative Data

Non-traditional data sources for trading insights.

Data & Technology

API Integration

Connecting external data sources to trading systems.

Data & Technology

B

Break-Even Point

The price at which buying and selling results in zero profit or loss after fees.

Fundamentals

Binary Market

A market with only two possible outcomes (Yes/No, True/False), the most common prediction market format.

Market Types

Bid

An offer to buy contracts at a specified price.

Market Mechanics

Bracket Order

Entry order paired with stop-loss and take-profit orders.

Order Types

Beta

Exposure to overall market movements or systematic factors.

Trading

Buy and Hold

Maintaining initial position without active trading.

Trading

Breakout Trading

Trading when prices move beyond established ranges.

Trading Strategies

Bankroll

The total amount of money a trader has available for trading.

Risk Management

Bankroll Management

Systematic approach to allocating trading capital.

Risk Management

Betting Percentage

Proportion of bets on each side.

Market Intelligence

Badge System

Visual indicators of achievements or milestones.

Gamification

Brier Score

Accuracy measure penalizing confident wrong predictions.

Performance Metrics

Bayesian Updating

Revising probabilities as new evidence emerges.

Forecasting

Base Rate

Historical frequency of similar events.

Forecasting

Backtesting

Testing strategies on historical market data.

Analysis

Black Swan

Unpredictable rare event with massive impact.

Risk Types

Bull Market

Period of generally rising prices and optimism.

Market Patterns

Bear Market

Period of generally falling prices and pessimism.

Market Patterns

Best Execution

Regulatory obligation to get most favorable terms.

Execution

Bot Trading

Algorithmic trading through API access.

Execution

Bollinger Bands

Price channels showing volatility ranges.

Technical Charts

Bull Flag

Continuation pattern in upward trending markets.

Technical Charts

Bear Flag

Continuation pattern in downward trending markets.

Technical Charts

Batch Processing

Analyzing accumulated data at scheduled intervals.

Data & Technology

Bayesian Game

Strategic interaction with incomplete information.

Game Theory

C

Contract

A tradable instrument representing a claim on a specific outcome.

Fundamentals

Conditional Market

A market whose resolution depends on another event occurring first.

Market Types

Current Events Market

Markets on breaking news and developing situations.

Market Types

Continuous Market

Markets created ongoing for similar recurring events.

Market Types

Combinatorial Market

Market allowing bets on combinations of related outcomes.

Bet Types

Closed Market

A market no longer accepting trades, awaiting resolution.

Market Lifecycle

Cancelled Market

A market voided before resolution, typically with refunds.

Market Lifecycle

Conditional Order

Trade triggered by specified conditions being met.

Order Types

Cross-Market Arbitrage

Exploiting price differences for the same event across different platforms.

Trading

Contrarian Betting

Betting against public sentiment or consensus.

Trading Strategies

Consensus Play

Betting with the market majority.

Trading Strategies

Correlation

The degree to which two markets move together.

Risk Management

Closing Line

Final odds before market closes to new trades.

Market Intelligence

Calibration

How closely market probabilities match actual outcome frequencies.

Market Efficiency

Centralized Market

Traditional platform with company oversight and control.

DeFi & Blockchain

Community Resolution

Markets resolved by platform user voting.

Resolution

Clarification

Additional information provided to resolve ambiguities in market criteria.

Resolution

CFTC

Commodity Futures Trading Commission, US regulator of prediction markets.

Regulatory

Calibration Curve

Graph showing relationship between predicted and actual probabilities.

Performance Metrics

Confidence Interval

Range of probabilities expressing uncertainty.

Forecasting

Credible Interval

Bayesian probability range for uncertain values.

Forecasting

Confirmation Bias

Favoring information that supports existing beliefs.

Behavioral Biases

Counterparty Risk

Risk that other party won't fulfill obligations.

Risk Types

Custody Risk

Risk associated with third party holding funds.

Risk Types

Correlation Coefficient

Statistical measure of how two markets move together.

Statistics

Covariance

How two variables change together.

Statistics

Calendar Effect

Predictable pattern tied to specific dates or seasons.

Market Patterns

Correction

Short-term price decline during larger uptrend.

Market Patterns

Capitulation

Final panic selling marking potential bottom.

Market Patterns

Collusion

Coordinated trading by multiple parties to manipulate outcomes.

Market Manipulation

Corner

Controlling supply to manipulate prices (illegal in regulated markets).

Market Manipulation

Combinatorial Auction

Bidding on bundles of related items.

Mechanism Design

Chart

Visual representation of price movement over time.

Technical Charts

Candlestick Chart

Price chart showing open, high, low, close for each period.

Technical Charts

Category Filter

Organizing markets by subject area.

Platform Features

Curated List

Hand-picked collection of related markets.

Platform Features

Cloud Computing

Using remote servers for data processing and storage.

Data & Technology

Cross-Validation

Testing strategy across multiple data segments.

Model Validation

Cheap Talk

Costless claims that may not be credible.

Game Theory

Costly Signaling

Credible information conveyed through verifiable actions.

Game Theory

Common Knowledge

Information everyone knows everyone knows.

Game Theory

Capital Gain

Profit from selling asset at higher price.

Tax & Accounting

Capital Loss

Loss from selling asset at lower price.

Tax & Accounting

Cost Basis

Original purchase price for tax calculation.

Tax & Accounting

D

Dynamic Pricing

Prices that continuously update based on trading activity.

Market Mechanics

Displayed Order

Order visible in public order book.

Order Types

Day Trading

Opening and closing positions within a single day.

Trading

Diversification

Spreading investments across multiple uncorrelated markets to reduce risk.

Risk Management

Drawdown

Peak-to-trough decline in account value.

Risk Management

Decimal Odds

Odds format showing total return per unit wagered (e.g., 2.5).

Odds Formats

Dutch Book

Set of bets guaranteeing loss, the opposite of arbitrage.

Odds Formats

Dead Market

A market with minimal trading activity and stale prices.

Market Intelligence

Decentralized Market

Blockchain-based market operating without central authority.

DeFi & Blockchain

Dispute Resolution

Process for challenging or appealing market resolution decisions.

Resolution

Deposit Bonus

Promotional credits offered for funding an account.

Incentives & Rewards

Discrimination

Ability to assign different probabilities to different outcomes.

Performance Metrics

Decomposition

Breaking complex questions into simpler components.

Forecasting

Devil's Advocate

Deliberately arguing against your initial position.

Forecasting

Decision Tree

Diagram mapping possible decisions and their consequences.

Analysis

Discipline

Maintaining consistent strategy despite emotions or variance.

Behavioral Biases

Dead Cat Bounce

Brief price recovery during overall decline.

Market Patterns

Dominant Strategy

Action that's optimal regardless of others' choices.

Game Theory

Depth Chart

Visual representation of order book bids and asks.

Technical Charts

Double Top/Bottom

Price pattern indicating potential reversal.

Technical Charts

Data Export

Downloading trading history and performance data.

Platform Features

Delayed Data

Market information shown with time lag.

Data & Technology

Data Pipeline

Automated system for collecting, processing, and analyzing data.

Data & Technology

Deep Learning

Neural networks with many layers for complex patterns.

Machine Learning

Data Mining

Finding patterns in historical data that may not persist.

Model Validation

Direct Mechanism

System where players report types truthfully.

Mechanism Design

E

Election Market

Markets predicting electoral outcomes.

Market Types

Entertainment Market

Markets on awards, box office, and pop culture.

Market Types

Exacta

Predicting the top two finishers in correct order.

Bet Types

Event Contract

Binary contract paying fixed amount if event occurs.

Bet Types

Extended Market

A market whose resolution date has been pushed back.

Market Lifecycle

Early Resolution

Settling a market before the scheduled end date when outcome is certain.

Market Lifecycle

Exposure

The maximum amount a trader could lose based on their current positions.

Trading

Edge

The advantage a trader has over the market consensus.

Trading

Expected Value (EV)

The average outcome if a bet were repeated many times, calculated as (probability × payout).

Risk Management

Efficient Market

A market where prices quickly and accurately reflect all available information.

Market Efficiency

Efficient Market Hypothesis

Theory that prices reflect all available information.

Market Efficiency

Experience Points (XP)

Accumulating score from platform participation.

Gamification

Ensemble Forecast

Combining multiple prediction methods or forecasters.

Forecasting

Event Study

Analyzing price reactions to specific news events.

Analysis

Expected Utility

Value of outcomes weighted by probability and subjective worth.

Decision Theory

Execution Quality

How well trades are filled relative to market.

Execution

Edge Computing

Processing data close to source for faster response.

Data & Technology

F

Fair Value

The theoretically correct market price based on true probability.

Fundamentals

Financial Market

Markets predicting economic indicators, stock prices, or crypto values.

Market Types

Futures Market

Long-dated contracts on eventual outcomes.

Market Types

Fill

The execution of an order, either partial or complete.

Order Types

Fill-or-Kill

Order that must fill completely immediately or cancel entirely.

Order Types

Fade the Public

Strategy of betting against popular opinion.

Trading Strategies

Fixed Stake

Betting the same amount regardless of confidence or results.

Risk Management

Fractional Odds

Traditional odds format showing profit ratio (e.g., 3/2).

Odds Formats

Fixed Payout

Predetermined payment amount for winning contracts.

Payout & Fees

Fee Tier

Volume-based discount structure.

Payout & Fees

Forecast Score

Metric evaluating prediction accuracy.

Performance Metrics

Fermi Estimation

Technique for making rough calculations from first principles.

Forecasting

Fundamental Analysis

Evaluating underlying factors that determine outcomes.

Analysis

FOMO (Fear of Missing Out)

Impulsive trading driven by fear of missing opportunities.

Behavioral Biases

Fat Tail

Distribution with more extreme outcomes than normal curve.

Statistics

Front Running

Trading ahead of known large orders to profit from expected price movement.

Market Manipulation

Featured Markets

Highlighted markets promoted by the platform.

Platform Features

Feature Engineering

Creating predictive variables from raw data.

Machine Learning

Folk Theorem

Result that many outcomes possible in repeated games.

Game Theory

FIFO (First In, First Out)

Assuming oldest shares sold first.

Tax & Accounting

G

Geopolitical Market

Markets on international relations, conflicts, and diplomacy.

Market Types

Good-Till-Canceled

Order remaining active until filled or manually canceled.

Order Types

Gas Fee

Transaction cost on blockchain-based platforms.

Payout & Fees

Grace Period

Time after scheduled resolution for outcome verification before final settlement.

Resolution

Good Judgment Project

Academic study identifying characteristics of top forecasters.

Forecasting

Gambler's Fallacy

Believing past random events affect future independent events.

Behavioral Biases

Game Theory

Mathematical study of strategic interaction.

Game Theory

Grim Trigger Strategy

Cooperating until defection, then permanent punishment.

Game Theory

Gambling Income

Tax treatment of wins as ordinary income.

Tax & Accounting

H

Head-to-Head

Market comparing two specific competitors or outcomes.

Bet Types

Hidden Order

Order not displayed to other market participants.

Order Types

Hedge

A position taken to offset potential losses in another position.

Trading

Handicapping

Analyzing markets to identify value bets.

Trading

House Edge

Built-in mathematical advantage for platform in each market.

Payout & Fees

Hindsight Bias

Believing past events were more predictable than they were.

Behavioral Biases

Hot Hand Fallacy

Believing winning streaks will continue beyond statistical expectation.

Behavioral Biases

Herd Behavior

Following crowd sentiment rather than independent analysis.

Behavioral Biases

High-Frequency Trading

Extremely rapid automated trading strategies.

Execution

Head and Shoulders

Reversal pattern suggesting trend change.

Technical Charts

Historical Data

Past market prices and volumes for analysis.

Data & Technology

I

Implied Probability

The likelihood percentage derived from market odds.

Fundamentals

Instant Market

Markets resolving within hours.

Market Types

Index Contract

Contract whose value depends on a numeric index or measurement.

Bet Types

Information Aggregation

The market's ability to incorporate dispersed knowledge into prices.

Market Mechanics

Invalid Market

Market with flawed criteria requiring special handling.

Market Lifecycle

Immediate-or-Cancel

Order that fills immediately possible then cancels remainder.

Order Types

Iceberg Order

Large order with only portion visible to market.

Order Types

Impermanent Loss

Temporary loss liquidity providers face when token prices diverge.

DeFi & Blockchain

Inside View

Making predictions based on particular case specifics.

Forecasting

Idiosyncratic Risk

Risk specific to particular market or position.

Risk Types

Insider Trading

Trading on non-public material information.

Market Manipulation

Information Asymmetry

When some participants have more knowledge than others.

Game Theory

Incentive Compatibility

Design ensuring honest participation is optimal.

Mechanism Design

Imperfect Information

Uncertainty about other players' past choices.

Game Theory

Indirect Mechanism

System where actions differ from private information.

Mechanism Design

K

Kelly Criterion

A formula for determining optimal bet size based on edge and bankroll.

Risk Management

KYC (Know Your Customer)

Identity verification required by regulated platforms.

Regulatory

L

Loss

The amount lost when shares resolve unfavorably or are sold at a loss.

Fundamentals

Linked Markets

Markets whose outcomes are interdependent or correlated.

Market Types

Long-Term Market

Markets resolving months or years in the future.

Market Types

Liquidity

The ease with which contracts can be bought or sold without significantly affecting price.

Market Mechanics

Limit Order

An order to buy or sell at a specific price or better.

Order Types

Long Position

Holding Yes shares, betting the event will occur.

Trading

Live Trading

Active trading with real capital.

Trading

Line Movement

Change in odds over time.

Market Intelligence

Liquidity Pool

Aggregated capital that provides trading liquidity in an AMM system.

DeFi & Blockchain

Liquidity Provider (LP)

Someone who deposits funds to facilitate trading in exchange for fees.

DeFi & Blockchain

Liquidity Subsidy

Payments to market makers for providing continuous prices.

Incentives & Rewards

Level System

Progression tiers based on activity or performance.

Gamification

Leaderboard

Ranking of top traders by performance metrics.

Gamification

Log Score

Logarithmic accuracy measure heavily penalizing wrong probabilities.

Performance Metrics

Loss Aversion

Psychological tendency to avoid losses more than seek gains.

Behavioral Biases

Liquidity Risk

Risk of being unable to exit position at fair price.

Risk Types

Layering

Multiple orders at different prices to create false impression.

Market Manipulation

Linear Pricing

Each share costs same regardless of quantity.

Mechanism Design

Line Chart

Simple chart connecting prices over time.

Technical Charts

Latency

Delay between event occurrence and system response.

Data & Technology

Look-Ahead Bias

Using information not available at the time in backtests.

Model Validation

Lemon Problem

Difficulty determining quality leading to market breakdown.

Game Theory

Long-Term Gain/Loss

Result from positions held over one year.

Tax & Accounting

LIFO (Last In, First Out)

Assuming newest shares sold first.

Tax & Accounting

M

Multi-Outcome Market

A market with three or more mutually exclusive possible outcomes.

Market Types

Market Resolution

The process of determining the correct outcome and settling all positions when an event concludes.

Market Mechanics

Market Maker

An automated system or entity that provides continuous liquidity by offering to buy and sell at specified prices.

Market Mechanics

Market Depth

The market's ability to sustain large orders without substantial price impact.

Market Mechanics

Market Cap

Total value of all shares if liquidated at current prices.

Market Mechanics

Market Creator

The person or entity who establishes a new prediction market.

Market Lifecycle

Market Parameters

Settings defining resolution criteria, end date, and market rules.

Market Lifecycle

The stages from creation through trading to resolution.

Market Lifecycle

Market Order

An order to buy or sell immediately at the best available current price.

Order Types

Minimum Fill

Order requiring at least specified quantity.

Order Types

Maker

Trader providing liquidity with limit order.

Trading

Momentum Trading

Following strong directional price trends.

Trading Strategies

Mean Reversion

Betting prices will return toward average levels.

Trading Strategies

Martingale

Doubling position size after losses (high-risk strategy).

Trading Strategies

Maximum Drawdown

Largest historical peak-to-trough decline.

Risk Management

Money Percentage

Proportion of actual money on each side.

Market Intelligence

Market Inefficiency

Predictable deviations from fair value that create profit opportunities.

Market Efficiency

Mispricing

When the market probability doesn't reflect the true likelihood of an event.

Market Efficiency

Market Anomaly

Pattern inconsistent with efficient market theory.

Market Efficiency

Maker Fee

Lower fee for providing liquidity.

Payout & Fees

Manual Resolution

Markets requiring human judgment to determine outcomes.

Resolution

Mean Absolute Error

Average difference between predictions and outcomes.

Performance Metrics

Model Averaging

Weighting multiple models based on their performance.

Forecasting

Meta-Analysis

Systematic synthesis of multiple data sources.

Analysis

Monte Carlo Simulation

Using repeated random sampling to model probability distributions.

Analysis

Market Risk

General risk from price movements.

Risk Types

Momentum Effect

Tendency for price trends to persist.

Market Patterns

Market Manipulator

Trader attempting to artificially move prices for advantage.

Market Manipulation

Momentum Ignition

Creating artificial price movement to trigger automated systems.

Market Manipulation

Minimax

Strategy minimizing maximum possible loss.

Decision Theory

Maximin

Strategy maximizing minimum possible gain.

Decision Theory

Moral Hazard

When protection from risk leads to riskier behavior.

Game Theory

Mechanism Design

Creating rules and incentives to achieve desired outcomes.

Mechanism Design

Market Scoring Rule

Mechanism combining market making with proper scoring.

Mechanism Design

Moving Average

Average price over a rolling time window.

Technical Charts

MACD

Trend-following momentum indicator using moving averages.

Technical Charts

Market Browser

Interface for discovering and filtering available markets.

Platform Features

Multi-Market View

Interface showing related markets simultaneously.

Platform Features

Market Snapshot

Point-in-time view of market state.

Data & Technology

Market Microstructure

Study of price formation mechanics.

Data & Technology

Machine Learning

Algorithms that learn patterns from data.

Machine Learning

Mechanism

Set of rules governing interaction and outcomes.

Mechanism Design

Mark-to-Market

Daily settlement of gains/losses for tax purposes.

Tax & Accounting

N

No Shares

Contracts that pay out if the event does not occur or the statement is false.

Fundamentals

N/A Resolution

Outcome when market criteria cannot be determined.

Market Lifecycle

Net Position

The difference between Yes and No shares held.

Trading

News Trading

Making trades based on breaking information.

Trading Strategies

Negative Expected Value (-EV)

A bet where the expected return is less than the cost.

Risk Management

Nash Equilibrium

Situation where no participant can improve by changing strategy alone.

Game Theory

Nonlinear Pricing

Price varies with quantity purchased.

Mechanism Design

Notification

Alert about relevant market developments or opportunities.

Platform Features

Neural Network

Machine learning model inspired by brain structure.

Machine Learning

Natural Language Processing

Analyzing text to extract trading signals.

Machine Learning

News Analytics

Systematic analysis of news for trading signals.

Machine Learning

O

Over/Under

Market predicting whether a value exceeds or falls below a threshold.

Bet Types

Order Book

A list of buy and sell orders organized by price level in a traditional exchange format.

Market Mechanics

Open Interest

The total number of outstanding contracts in a market.

Market Mechanics

Open Market

A market currently accepting trades.

Market Lifecycle

One-Cancels-Other (OCO)

Two orders where filling one cancels the other.

Order Types

Overround

When total implied probabilities exceed 100%, representing platform edge.

Odds Formats

Opening Line

Initial odds when market first opens.

Market Intelligence

Overconfidence

When market probabilities are too extreme relative to actual uncertainty.

Market Efficiency

Oracle

Service providing external data for smart contract resolution.

DeFi & Blockchain

Oracle Problem

Challenge of reliably bringing real-world data to blockchain markets.

DeFi & Blockchain

Outside View

Basing predictions on statistical patterns rather than specific details.

Forecasting

Oracle Risk

Possibility of incorrect or manipulated data feeds.

Risk Types

Overfitting

Creating model too specific to historical data to generalize.

Model Validation

Out-of-Sample Testing

Validating strategy on data not used in development.

Model Validation

P

Prediction Market

A market where participants trade contracts whose payoffs depend on unknown future events, aggregating information to produce probabilistic forecasts.

Fundamentals

Probability

The market-implied likelihood of an event occurring, expressed as a percentage.

Fundamentals

Payout

The amount received when holding winning shares at resolution.

Fundamentals

Profit

The gain after subtracting initial investment from payout.

Fundamentals

Political Market

Broader category including elections, appointments, and policy outcomes.

Market Types

Prop Bet (Proposition Bet)

Market on a specific occurrence within a larger event.

Bet Types

Percentile Market

Market on where a value ranks among a distribution.

Bet Types

Parlay

Single bet combining multiple markets, all must win for payout.

Bet Types

Price Discovery

The process by which markets determine fair value through trading activity.

Market Mechanics

Push

When all positions are refunded due to ambiguous or invalid outcome.

Market Lifecycle

Pegged Order

Order price automatically adjusting relative to market.

Order Types

Post-Only Order

Order that adds liquidity or cancels.

Order Types

Partial Fill

Order executed for less than full requested amount.

Order Types

Position

The quantity and type of shares a trader holds in a market.

Trading

Position Trading

Long-term approach holding until resolution.

Trading

Paper Trading

Practicing with simulated trades without real money.

Trading

Passive Strategy

Minimal trading after establishing initial positions.

Trading Strategies

Positive Expected Value (+EV)

A bet where the expected return exceeds the cost.

Risk Management

Portfolio

The collection of all positions a trader holds across multiple markets.

Risk Management

Proportional Betting

Sizing bets as percentage of bankroll.

Risk Management

Portfolio Rebalancing

Adjusting positions to maintain desired allocation.

Risk Management

Public Money

Bets from casual or recreational traders.

Market Intelligence

Price Movement

Changes in probability over time.

Market Intelligence

Payout Structure

How winnings are calculated and distributed.

Payout & Fees

Proportional Payout

Winnings based on investment amount and final odds.

Payout & Fees

Parimutuel Betting

Pool-based system where winners split the pool proportionally.

Payout & Fees

Platform Fee

Percentage taken by the platform from winnings or trades.

Payout & Fees

Play Money

Virtual currency used for practice or reputation without real financial value.

DeFi & Blockchain

Permissionless

Markets anyone can create or trade in without approval.

DeFi & Blockchain

Permissioned

Markets requiring authorization or meeting specific criteria to participate.

DeFi & Blockchain

Precedent

Past resolution decisions guiding similar future markets.

Resolution

Prize Pool

Total rewards distributed in a tournament.

Gamification

Profit Factor

Ratio of gross profits to gross losses.

Performance Metrics

Prediction Accuracy

Overall correctness of probabilistic forecasts.

Performance Metrics

Prior Probability

Initial probability before considering new evidence.

Forecasting

Posterior Probability

Updated probability after incorporating new evidence.

Forecasting

Pre-Mortem

Imagining reasons a forecast could fail before committing.

Forecasting

Platform Risk

Risk of platform failure, hack, or insolvency.

Risk Types

Pump and Dump

Manipulative scheme artificially inflating then selling.

Market Manipulation

Prospect Theory

Behavioral model of decision-making under risk.

Decision Theory

Positive-Sum Game

Situation where all parties can benefit simultaneously.

Game Theory

Proper Scoring Rule

Reward system making honest probability reporting optimal.

Mechanism Design

Prediction Market Design

Creating rules and structures for effective markets.

Mechanism Design

Price Improvement

Filling better than current market price.

Execution

Pattern Recognition

Identifying recurring chart formations.

Technical Charts

Portfolio View

Dashboard showing all current positions.

Platform Features

Polling Data

Survey results used to inform political markets.

Data & Technology

Parameter Optimization

Finding best settings for a trading strategy.

Model Validation

Perfect Information

Situation where all past actions are known.

Game Theory

Private Information

Knowledge held by some but not all participants.

Game Theory

Professional Trader Status

Tax classification for qualifying active traders.

Tax & Accounting

Q

Quote Stuffing

Manipulative practice of rapidly placing/canceling orders.

Market Manipulation

Qualified Account

Tax-advantaged account like IRA or 401(k).

Tax & Accounting

R

Range Market

Market predicting which range a value will fall into.

Bet Types

Resolution Criteria

The specific, predetermined standards used to determine the correct market outcome.

Market Mechanics

Resolution Source

The authoritative source (news outlet, database, official body) used to verify the market outcome.

Market Mechanics

Resolved Market

A market where the outcome has been determined and settled.

Market Lifecycle

Risk Management

Strategies to minimize potential losses and preserve capital.

Risk Management

Risk of Ruin

Probability of losing entire bankroll.

Risk Management

Recovery

Returning to previous peak value after drawdown.

Risk Management

Reverse Line Movement

Odds moving opposite to betting percentage.

Market Intelligence

Random Walk

Theory that price changes are independent and unpredictable.

Market Efficiency

Rake

Percentage of winnings taken as platform fee.

Payout & Fees

Rebate

Payment received for providing liquidity.

Payout & Fees

Real Money

Actual currency with financial value used for trading.

DeFi & Blockchain

Resolution Authority

Entity responsible for determining official market outcomes.

Resolution

Reputable Source

Pre-specified authoritative outlet used for resolution verification.

Resolution

Resolution Lag

Time between event conclusion and official market settlement.

Resolution

Regulatory Compliance

Adherence to legal requirements governing prediction markets.

Regulatory

Referral Bonus

Rewards for bringing new users to a platform.

Incentives & Rewards

Reputation System

Track record that builds credibility and unlocks privileges.

Gamification

ROI (Return on Investment)

Percentage profit relative to capital invested.

Performance Metrics

Resolution Rate

How frequently a forecaster's predictions resolve correctly.

Performance Metrics

Ranked Probability Score

Accuracy measure for multi-outcome forecasts.

Performance Metrics

Root Mean Square Error

Standard deviation of prediction errors.

Performance Metrics

Reference Class

Set of similar historical cases used for forecasting.

Forecasting

Red Team

Group tasked with finding flaws in a forecast or analysis.

Forecasting

Recency Bias

Overweighting recent events when making predictions.

Behavioral Biases

Regulatory Risk

Uncertainty about future legal status or requirements.

Risk Types

Regression Analysis

Statistical technique modeling relationships between variables.

Statistics

Reversal Effect

Tendency for extreme prices to revert to mean.

Market Patterns

Rally

Period of sustained price increases.

Market Patterns

Risk Premium

Additional return required for accepting uncertainty.

Decision Theory

Risk Neutral

Valuing bets at pure expected value without risk adjustment.

Decision Theory

Risk Averse

Requiring higher expected value to accept risk.

Decision Theory

Risk Seeking

Willing to accept lower expected value for excitement or upside.

Decision Theory

RSI (Relative Strength Index)

Momentum indicator identifying overbought/oversold.

Technical Charts

Resistance Level

Price where selling pressure historically prevents further rise.

Technical Charts

Real-Time Data

Live streaming market information.

Data & Technology

Real-Time Processing

Analyzing data as it arrives for immediate action.

Data & Technology

Robustness Check

Verifying strategy works across different parameters.

Model Validation

Reputation Effects

Impact of past behavior on future opportunities.

Game Theory

Repeated Game

Strategic interaction over multiple periods.

Game Theory

Revelation Principle

Any mechanism equivalent to truthful direct mechanism.

Mechanism Design

S

Units of ownership in a particular outcome that pay out if that outcome occurs.

Fundamentals

Sports Market

Markets on sporting events and outcomes.

Market Types

Science Market

Markets on research outcomes, replication studies, or discoveries.

Market Types

Short-Term Market

Markets resolving within days or weeks.

Market Types

Seasonal Market

Markets that operate during specific time periods.

Market Types

Spread

The difference between the highest bid price and the lowest ask price.

Market Mechanics

Static Odds

Fixed prices that don't change after bet placement.

Market Mechanics

Slippage

The difference between expected price and actual execution price, typically in fast-moving markets.

Order Types

Stop Order

Order triggered when price reaches specified level.

Order Types

Stop-Loss Order

Automatic exit order limiting potential loss.

Order Types

Short Position

Holding No shares, betting the event will not occur.

Trading

Statistical Arbitrage

Using quantitative models to identify mispriced relationships.

Trading

Scalping

Making many small profitable trades on short-term price movements.

Trading

Swing Trading

Holding positions for days or weeks to capture larger moves.

Trading

Stake

The amount of money invested in a particular trade.

Risk Management

Steam

Rapid line movement from heavy betting pressure.

Market Intelligence

Sharp Money

Bets from sophisticated, successful traders.

Market Intelligence

Sharp Action

Trading from informed or professional participants.

Market Intelligence

Square Action

Trading from uninformed or casual participants.

Market Intelligence

Sharp Move

A rapid, significant price change in response to news or large trades.

Market Intelligence

Subsidy

Additional incentives provided to encourage trading or liquidity provision.

Payout & Fees

Sweepstakes Model

Legal structure where users receive free tokens but can win real prizes.

DeFi & Blockchain

Stablecoin

Cryptocurrency pegged to a stable asset like the US dollar.

DeFi & Blockchain

Smart Contract

Self-executing code on blockchain that automatically enforces market rules.

DeFi & Blockchain

Screenshot Evidence

Visual documentation used to verify market outcomes.

Resolution

Subsidized Market

Market where platform absorbs losses to encourage participation.

Incentives & Rewards

Streak

Consecutive days or successful predictions.

Gamification

Sharpe Ratio

Risk-adjusted return measure.

Performance Metrics

Superforecaster

Exceptionally accurate forecaster, identified through research.

Forecasting

Scenario Analysis

Considering multiple possible future paths.

Forecasting

Sentiment Analysis

Gauging public opinion and emotional biases.

Analysis

Sensitivity Analysis

Testing how forecasts change with different assumptions.

Analysis

Sunk Cost Fallacy

Continuing investment based on past costs rather than future value.

Behavioral Biases

Status Quo Bias

Preference for current positions over making changes.

Behavioral Biases

Smart Contract Risk

Vulnerability in blockchain code enabling exploits.

Risk Types

Systematic Risk

Risk affecting entire market or asset class.

Risk Types

Standard Deviation

Square root of variance, measuring typical price swing.

Statistics

Stationarity

Statistical property where patterns remain constant over time.

Statistics

Size Effect

Systematic differences based on market size or liquidity.

Market Patterns

Sideways Market

Period of range-bound trading without clear trend.

Market Patterns

Sell-Off

Period of heavy selling pressure and price decline.

Market Patterns

Short Squeeze

Rapid price rise forcing short sellers to cover.

Market Patterns

Sybil Attack

Creating multiple accounts to manipulate markets or exploit bonuses.

Market Manipulation

Spoofing

Placing orders without intent to execute to manipulate prices.

Market Manipulation

Signaling

Actions conveying private information credibly.

Game Theory

Screening

Designing mechanisms to elicit private information.

Mechanism Design

Smart Order Routing

Automatically finding best execution across venues.

Execution

Support Level

Price where buying pressure historically prevents further decline.

Technical Charts

Search Function

Tool for finding specific markets or topics.

Platform Features

Satellite Imagery

Remote sensing data for various predictions.

Data & Technology

Supervised Learning

Training models on labeled historical outcomes.

Machine Learning

Sentiment Scoring

Quantifying emotional tone of text or markets.

Machine Learning

Social Media Mining

Extracting insights from social platforms.

Machine Learning

Survivorship Bias

Error from only analyzing surviving entities.

Model Validation

Stress Testing

Evaluating strategy performance in extreme scenarios.

Model Validation

Scenario Testing

Assessing strategy across various hypothetical situations.

Model Validation

Subgame Perfect Equilibrium

Strategy optimal at every decision point.

Game Theory

Short-Term Gain/Loss

Result from positions held less than one year.

Tax & Accounting

Specific Identification

Designating which shares are sold.

Tax & Accounting

T

True Odds

The actual probability excluding platform commission or edge.

Fundamentals

Tournament Market

Markets associated with competitive forecasting events.

Market Types

Trading Volume

The total value of contracts traded over a time period.

Market Mechanics

Take-Profit Order

Automatic exit order securing desired gain.

Order Types

Trailing Stop

Stop order that adjusts automatically as price moves favorably.

Order Types

Time Arbitrage

Profiting from predictable price changes over time.

Trading

Tailing

Following another trader's bets.

Trading

Tout

Someone selling betting picks or advice.

Trading

Taker

Trader removing liquidity with market order.

Trading

Transaction Fee

Cost charged for executing trades.

Payout & Fees

Taker Fee

Higher fee for removing liquidity.

Payout & Fees

Token

Platform-specific currency, may be cryptocurrency or virtual representation.

DeFi & Blockchain

Timestamp

Specific date and time that determines market resolution.

Resolution

Trust Score

Metric indicating reliability of a trader or market creator.

Gamification

Tournament

Competitive forecasting event with prizes.

Gamification

Track Record

Historical performance of a trader or strategy.

Performance Metrics

Technical Analysis

Using historical price patterns to predict future movements.

Analysis

Triangulation

Using multiple independent approaches to estimate probability.

Analysis

Tilt

Emotional state leading to poor decision-making after losses.

Behavioral Biases

Tail Risk

Low-probability but high-impact extreme outcomes.

Risk Types

Time Series Analysis

Statistical methods for analyzing sequential data.

Statistics

Time-Weighted Average Price (TWAP)

Executing order evenly over time.

Execution

Trendline

Diagonal line connecting price points showing directional momentum.

Technical Charts

Technical Indicator

Mathematical calculation on price data for analysis.

Technical Charts

Tag System

Labels helping organize and discover related markets.

Platform Features

Trending Markets

Markets with recent high activity or interest.

Platform Features

Tick Data

Individual transaction records at finest granularity.

Data & Technology

Training Set

Historical data used to develop strategy.

Model Validation

Test Set

Data reserved for final strategy evaluation.

Model Validation

Tit-for-Tat

Strategy of reciprocating others' previous actions.

Game Theory

Tax-Loss Harvesting

Selling losing positions to offset taxable gains.

Tax & Accounting

Taxable Account

Regular brokerage account subject to annual taxation.

Tax & Accounting

U

Unit System

Standardizing bet sizes as multiples of a base unit.

Risk Management

Underround

When total implied probabilities fall below 100%, usually from subsidies.

Odds Formats

Underconfidence

When market probabilities cluster too close to 50% despite clear signals.

Market Efficiency

UTC

Coordinated Universal Time, standard timezone for market resolution.

Resolution

Utility Function

Mathematical representation of preferences under uncertainty.

Decision Theory

Unsupervised Learning

Finding patterns without predetermined outcomes.

Machine Learning

V

Value Betting

Identifying and exploiting mispricings for long-term profit.

Trading

Volatility

The degree of price fluctuation in a market.

Market Intelligence

Vigorish (Vig)

Commission taken by the platform, built into odds.

Payout & Fees

Volume Bonus

Rewards for high trading activity.

Incentives & Rewards

Variance

Statistical measure of price dispersion.

Statistics

VCG Mechanism

Incentive-compatible auction mechanism.

Mechanism Design

Volume-Weighted Average Price (VWAP)

Executing proportional to market volume.

Execution

Volume Chart

Display of trading activity levels.

Technical Charts

Validation Set

Data used to tune strategy parameters.

Model Validation

W

Wisdom of Crowds

The principle that aggregated predictions from many individuals often outperform experts.

Market Efficiency

Withdrawal Fee

Cost to transfer funds from the platform.

Payout & Fees

Win Rate

Percentage of profitable trades.

Performance Metrics

Wash Trading

Simultaneously buying and selling to create false volume appearance.

Market Manipulation

Winner's Curse

Winning auction by overpaying more than others.

Game Theory

Watchlist

Saved list of markets for easy monitoring.

Platform Features

Webhook

Automated notification of market events to external systems.

Platform Features

Weather Data

Meteorological information for relevant markets.

Data & Technology

Web Scraping

Automated collection of online data.

Data & Technology

Walk-Forward Analysis

Continuously updating strategy on rolling windows.

Model Validation

Wash Sale

Selling and immediately repurchasing to manipulate tax treatment.

Tax & Accounting

Wash Sale Rule

Tax regulation limiting loss deduction for repurchased securities.

Tax & Accounting

Y

Yes Shares

Contracts that pay out if the event occurs or the statement is true.

Fundamentals

Z

Zero-Sum Game

Situation where one party's gain equals another's loss.

Game Theory