How are prices calculated?
The prices probabilities displayed on Polymarket are the midpoint of the bid-ask spread in the orderbook.
Initial Price
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When a market is created, there are initially zero shares and no pre-defined prices or odds.
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Market makers (a fancy term for traders placing limit orders) interested in buying YES or NO shares can place Limit Orders at the price they’re willing to pay
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When offers for the YES and NO side equal $1.00, the order is “matched” and that $1.00 is converted into 1 YES and 1 NO share, each going to their respective buyers.
For example, if you place a limit order at $0.60 for YES, that order is matched when someone places a NO order at $0.40. This becomes the initial market price.
Future Price
The prices displayed on Polymarket are the midpoint of the bid-ask spread in the orderbook — unless that spread is over $0.10, in which case the last traded price is used.
Like the stock market, prices on Polymarket are a function of realtime supply & demand.
Prices = Probabilities
In the market below, the probability of 37% is the midpoint between the 34¢ bid and 40¢ ask. If the bid-ask spread is wider than 10¢, the probability is shown as the last traded price.
