Binary Market

In a binary market, the platform creates two complementary Yes/No Shares for each listed question. A YES share pays $1.00 if the event resolves in the affirmative; a NO share pays $1.00 if it does not. Because the two outcomes are exhaustive and mutually exclusive, a YES share and a NO share together are always worth exactly $1.00 at Settlement. The Contract Price of YES at any given moment equals the Implied Probability that the market assigns to the event occurring. For instance, a YES share trading at $0.74 signals a 74% chance. Traders interact via an Order Book, placing Limit Order or Market Order instructions to buy or sell at their desired prices. Trading Fees are typically a few cents per share and are charged on the winning side.

Binary markets contrast with Scalar Market and Categorical Market structures. A scalar market resolves to a number within a continuous range, offering proportional payouts rather than winner-take-all results. A categorical market lists three or more discrete outcomes, such as the possible winner of a multi-candidate election. Binary markets are preferred for straightforward yes-or-no questions because they are simple to understand and easy to price. The Price as Probability relationship is clearest in the binary format, since a single price encodes the full probability distribution. When a question can be reduced to a binary form, platforms usually choose this structure to maximize Liquidity and trader participation. Kalshi and Polymarket both heavily favor binary market listings.