Prediction market glossary: 30 terms explained simply
From "event contract" to "settlement", every term you'll see in the apps, in one sentence each.
By Catie Di Stefano, Founder and Editor
- Ask: the lowest price someone will sell a contract for right now.
- Bid: the highest price someone will pay right now.
- CFTC: the Commodity Futures Trading Commission, the US federal regulator for futures and event contracts.
- Contract: one share in a market. Pays $1 if your side wins, $0 if not.
- DCM (designated contract market): a CFTC-approved exchange, like Kalshi.
- DCO (derivatives clearing organization): a company that clears and guarantees trades.
- Event contract: the legal name for a prediction market contract.
- Exchange: a platform that matches buyers and sellers rather than taking bets itself.
- Expiration: when trading stops and the market waits for the result.
- Fill: when your order is matched and executed.
- Geolocation: the app's check of where you physically are.
- Implied probability: the chance suggested by the price (60¢ = 60%).
- KYC ("know your customer"): identity checks when you sign up.
- Limit order: an order to buy or sell only at your chosen price or better.
- Liquidity: how much money is available to trade at each price.
- Maker: a trader whose limit order waits in the book (often pays lower fees).
- Market maker: a firm that constantly posts buy and sell prices.
- Market order: buy or sell immediately at the best available price.
- No: the side that pays $1 if the event doesn't happen.
- Order book: the list of all waiting buy and sell orders.
- Peer-to-peer: users trade directly with each other, as on Novig and ProphetX.
- Position: the contracts you currently hold.
- Resolution / settlement: the moment a market is decided and pays out.
- Rules / resolution source: the official source that decides a market.
- Spread: the gap between the bid and the ask.
- Sweepstakes model: a promotional model some apps, such as Rebet, use, with free coins and redeemable coins. Novig used this model until it became a CFTC-regulated exchange in August 2026.
- Taker: a trader whose order fills immediately against a waiting one.
- USDC: a US-dollar stablecoin used on crypto-based markets like Polymarket's international site.
- Volume: how much has been traded in a market.
- Yes: the side that pays $1 if the event happens.
Next: How do prediction markets work?
Frequently asked questions
What is an event contract?
A contract whose payout depends on whether a specific event happens, for example "Will CPI be above 3%?". It pays a fixed amount (usually $1) if yes and nothing if no.
What's the difference between a maker and a taker?
A maker posts an order that waits in the order book; a taker's order fills immediately against a waiting one. Some platforms charge takers more.
