The Prediction Market Glossary
40 terms, defined the way Polymarket and Kalshi actually work — not the way a dictionary would put it.
Most trading glossaries are borrowed from somewhere else. The vocabulary of prediction markets mostly arrived from sportsbooks and from equities trading, carrying assumptions that are wrong here: there is no house setting a line, quoted numbers are prices rather than odds, and the two venues that matter handle multi-outcome events under different guarantees that look identical in English.
So the venue-specific entries below are written from the code that reads these APIs every few seconds. The fee entry carries Kalshi's actual per-contract formula and where on the price range it hurts. The negative risk entry explains why that flag makes both full-set directions provable on Polymarket while Kalshi's mutually exclusive flag only supports one of them. The executable ask entry explains why every lock on this site is priced off the ask of the exact contract being bought and never off the last trade.
Where a term is genuinely generic — expected value, drawdown, adverse selection — it is still defined against how it behaves on a fixed-payout contract, which is different enough from the equities case to be worth spelling out.
Market structure
A contract that pays exactly $1 if a stated real-world outcome happens, and $0 if it does not.
A market with exactly two outcomes, quoted as a YES contract and a NO contract whose prices sum to $1 at fair value.
The specific document, feed, or authority a market's rules name as the thing that decides its outcome.
The moment a market's outcome is finalized and the winning contracts become worth exactly $1.
Kalshi's identifier for a family of recurring markets, and the prefix of every market ticker inside it.
Kalshi's flag for an event where at most one listed outcome can resolve YES — which is not the same as exactly one.
Polymarket's flag for a multi-outcome event where exactly one outcome resolves YES, enforced by its neg-risk adapter.
Claiming the $1 payout on a winning Polymarket position once its market has resolved.
Order books and execution
The matching engine that pairs resting limit orders by price and time — how both Polymarket and Kalshi fill trades.
The price you can actually buy at right now — the best resting offer for the exact contract you want, not the last price printed.
The price of the most recent print in a market — useful for noticing something, useless for deciding anything.
The distance between the best bid and the best ask — the immediate cost of entering and exiting a position.
How many contracts rest at each price level — the answer to how much size a market can absorb before the edge disappears.
The difference between the price you saw and the average price you actually filled at.
A maker posts a resting order and waits to be filled; a taker crosses the spread and fills immediately.
A large trade negotiated away from the continuous book and printed to the public tape as a single transaction.
The dollar value of a trade or position — contracts multiplied by the price actually paid per contract.
The number of contracts currently outstanding in a market — positions opened and not yet closed or settled.
Prices and probability
The probability a market price states directly: a contract at 30¢ implies roughly a 30% chance, before fees.
The amount by which a market's outcome prices sum to more than 100% — the margin built into the book.
The margin built into quoted prices; on an order-driven exchange the equivalent is the overround plus the venue fee.
Buying both sides of the same question at a combined all-in cost below the guaranteed payout, so every outcome pays.
The same real-world event carrying different prices on Polymarket and Kalshi at the same moment.
Whether the price you paid beat the market's price at the close — a fast, sample-efficient read on entry quality.
Buying the opposite side of a position you already hold, to reduce or remove the outcome you are exposed to.
Fees and costs
Kalshi's published per-contract trading fee, 0.07 x P x (1 - P), which peaks in the middle of the price range.
The charge for providing liquidity with a resting order — on Kalshi, an order that never crosses the spread pays no trading fee.
Price plus fees per contract — your true breakeven, and the only number position sizing should ever use.
Risk and sizing
The average result of a trade if it could be repeated forever — your probability times the payout, minus the all-in cost.
The stake fraction that maximises long-run bankroll growth, computed from your edge and the net payout multiple.
Staking a fixed fraction of the full Kelly number — typically a half or a quarter — to cut variance at a small cost in growth.
The decline from a peak to a later trough in a bankroll or track record.
Track records and PnL
Average return divided by the standard deviation of returns — how much of a record is edge rather than variance.
Gross winnings divided by gross losses across settled trades.
Profit or loss on positions still open, marked at current prices — real on a screen, not yet real in a balance.
Flow and participants
A trader who quotes both sides of a book continuously, earning the spread rather than taking a view.
The problem that the orders which fill you are disproportionately the ones you should not have wanted.
A lopsided share of aggressive trades hitting one side of a market — the only trader-intent signal Kalshi's public data supports.
A trader moving size large enough to matter to a market — on Polymarket, a public wallet anyone can read.
A trader whose record looks like repeatable skill rather than luck or size.
Where these terms come from
WhaleTracks reads Polymarket's public APIs and on-chain data, Kalshi's public APIs, and Open-Meteo forecasts for the weather tool. The definitions above describe how those sources behave and how this product models them. If you want the longer form, the tool guides walk through each tool end to end, the strategy write-ups cover how the concepts combine, and the methodology page documents the Sharp Score and its limits.
WhaleTracks is informational analytics, not financial advice. Nothing here is a recommendation to enter any trade. Past performance does not guarantee future results.