Prediction Markets are a new way to use your insights and opinions to trade on the result of key events for Sports, Economic Indicators, Cryptocurrencies and more. 

The market's view on the likelihood of an event happening (e.g, 1% to 99%) matches the price on a $0.01 to $0.99 scale. Contracts priced closer to $0.99 relate to events that are viewed as more likely to happen, while those priced closer to $0.01 relate to events that are viewed as less likely to happen.

You take a view on an upcoming event with prices available in a range between $0.01 and $0.99. Prices correspond to what the market currently believes is the likelihood of the result happening. 

Example: $0.05 = ~5% chance | $0.95 = ~95% chance

If a trader’s predicted result happens, the payoff is $1. If the trader’s predicted result doesn't happen, the payoff is $0. No other payoff is possible at the conclusion of an event.

Assume a trader thinks U.S. GDP will rise more than 2.25% in Q1. A related event contract for that result (Will GDP growth be at or above 2.25% in Q1?) is priced at $0.45; the trader can trade their view by buying the contract (selecting the “Yes” contract). 

If U.S. GDP rises by 3%, the trader earns $1, and their profit would be $1 - ($0.45 + fees). If GDP only rises 1.5%, their loss would be limited to the price they paid to enter the trade($0.45 + fees).

No, you may trade your position as many times as you want before the event is completed. You can take advantage of new information to increase your position, or close out your position before an event happens (or even while an event is taking place).

CME Group is the exchange that lists these Prediction Markets. Contracts will be listed at brokers.