What a market-implied probability actually means
A price of 0.62 is not a forecast, a promise, or the crowd being right. It is the price at which someone was willing to trade.
4 minute read · updated with the phase that shipped this page
In a prediction market, a share that pays $1.00 if an event happens trades at a price between $0 and $1. That price is usually read as the market's implied probability: 0.62 means 62%.
This reading has a precise meaning and a sloppy one. The precise one: 62% is the point where buyers and sellers agreed to trade, after fees and liquidity. The sloppy one: "there is a 62% chance." The second claim requires that the price is efficient, that everyone has the same information, and that nobody is using the market for something other than forecasting — hedges, publicity, or a badly calibrated bot.
What you can say with confidence is narrower and more useful: at 62%, the market is offering roughly 1.61 to 1 on the outcome. Whether that is a good price depends entirely on your own estimate, which is the only thing you actually control.
Qvicom Signal shows the venue's price and labels it as such. It does not turn a price into a probability statement of its own, and it never presents a price as a forecast.
- Is the price I am reading the mid, the last trade, or a stale quote?
- How much volume has actually traded at this price?
- Would this price survive a meaningful order, or is it a thin book?
Educational material only. Qvicom Signal is not a broker, exchange or adviser, cannot place orders, and does not accept deposits or wagers.