Prediction Market Glossary

A prediction market is a market where participants trade contracts whose payoff depends on the outcome of future events.

Implied probability is the likelihood of an event occurring as suggested by the current market price of an outcome contract.

A binary market is a prediction market with exactly two possible outcomes — typically "Yes" or "No."

A multi-outcome market is a prediction market with three or more possible outcomes.

Resolution is the process of determining the final outcome of a prediction market and settling all positions accordingly.

An order book is a real-time, organized list of buy and sell orders for a specific market, arranged by price level.

An AMM is an algorithmic system that provides liquidity and determines prices using a mathematical formula, rather than relying solely on human market makers.

Leverage allows traders to control a larger position than their deposited margin, amplifying both potential gains and losses.

The funding rate is a periodic payment exchanged between traders on opposite sides of the same market to keep prices aligned with the underlying probability.

Liquidity refers to the ease with which a contract can be bought or sold at a stable price without causing significant price impact.

On OmenX, binary market exposure is shown as YES or NO. A YES position tracks the YES outcome price; a NO position tracks the NO outcome price.

Yes and No shares are the basic tradable units in a binary prediction market, representing each side of a binary outcome.

A market maker is an entity that provides liquidity to a market by continuously placing buy and sell orders, profiting from the bid-ask spread.

Calibration measures how accurately a prediction market's prices correspond to actual outcome frequencies over time.

Hedging is the practice of taking a position in one market to offset potential losses in another related position.

Open interest is the total number of outstanding contracts that have not been settled or closed in a given market.

Notional value is the total value of a leveraged position, calculated as the position size multiplied by the contract price.

Initial margin is the minimum amount of collateral required to open a leveraged position.

The liquidation price is the price level at which a leveraged position will be automatically closed to prevent further losses beyond the deposited margin.

An oracle is a system that supplies external, real-world data to a blockchain-based smart contract for market resolution.

Cross margin is a margin mode where the entire available balance in a trader's account is shared as collateral across all open positions.

Slippage is the difference between the expected price of a trade and the actual execution price.

USDC (USD Coin) is a regulated stablecoin pegged 1:1 to the US dollar, used as the settlement currency on OmenX.

Base is an Ethereum Layer 2 blockchain developed by Coinbase, designed for fast, low-cost transactions while inheriting the security of the Ethereum mainnet.

On OmenX, YES and NO prices for the same binary outcome are complementary: NO price = 1 − YES price.