How Polymarket works: shares, prices, the order book and resolution

Every Polymarket market runs on one simple rule. Once you understand it, the order book, the prices and the way markets settle all make sense.

Polymarket can look complicated the first time you open a market: a chart, an order book, prices in cents, a page of rules. Under all of it is one rule that never changes. Once it clicks, the rest follows.

The one-dollar rule

Every outcome on Polymarket is a share that pays $1 if that outcome happens and $0 if it does not. A market on "Will it rain in London tomorrow?" has two shares, Yes and No. Exactly one of them will be worth $1 when the question is settled.

That is why prices are always between 0 and 100 cents, and why a price reads as a probability. If Yes trades at 70 cents, the market as a whole thinks there is about a 70% chance of rain.

A worked example

Say a market asks whether a bill passes this year, and Yes is trading at 35 cents.

You do not have to wait for the end. If news comes out a week later and Yes rises to 60 cents, you can sell your 100 shares for $60 and keep a $25 profit, whatever happens next.

Where shares come from

Shares are not printed by Polymarket and sold to you. They are created in pairs. One dollar can always be split into one Yes share and one No share, because together they are guaranteed to be worth exactly $1 at the end. The pair can also be merged back into one dollar at any time.

This is why the Yes and No prices of a market add up to about $1. If Yes is 62 cents, No is close to 38. If they drifted far apart, traders would split dollars into pairs and sell them, or buy both sides and merge them, until the prices lined up again.

The order book

Trades on Polymarket are matched in a central limit order book, the same kind a stock exchange uses. Every market page shows it:

• Bids are offers to buy: the highest price someone will pay right now.
• Asks are offers to sell: the lowest price someone will sell at right now.
• The spread is the gap between the best bid and the best ask. A tight spread, one cent or less, means a liquid market. A wide spread means trading in or out costs more.

You can trade in two ways. A market order takes the best price available right away. A limit order sets the price you want and waits in the book until someone accepts it. Traders who place limit orders are called makers, because they make liquidity; traders who fill them are takers.

Large orders matter. Buying $10,000 of a thin market can sweep through several price levels, so the average price you pay ends up worse than the price you first saw. Checking the book before a big trade, or splitting it up with limit orders, avoids that.

Farsight shows each market's live order book next to its price chart, with every level, the spread and the total value at each price, on its market pages.

Markets with many outcomes

A question like "Who will win the election?" is built as a set of separate Yes and No markets, one per candidate, grouped into one event. Only one of them can resolve Yes. Many of these events are set up so that a No share in one candidate can be converted into Yes shares in all the others, which keeps the prices of the whole event consistent: the Yes prices of every candidate add up to about $1.

Money, the blockchain and your account

Polymarket settles every trade on the Polygon blockchain. Your balance is held in a dollar stablecoin, worth one US dollar a unit, inside a wallet created for your account. You can deposit with a card or from an exchange, and for most actions Polymarket covers the blockchain fees itself, so you do not need any other crypto to trade.

Because everything happens on chain, every position, trade and payout is public. That is what lets sites like Farsight show any trader's profit and loss, open positions and full trading history, even though Polymarket's own profile pages show much less. You can look anyone up on Farsight profiles.

Fees and rewards

Most Polymarket markets have historically charged no trading fee. Polymarket now charges a taker fee on some market types, such as short-term crypto markets, and pays part of it back to makers as rebates. The fee is shown before you confirm a trade, so check it on the market you are trading.

Polymarket also pays liquidity rewards every day to traders who keep limit orders close to the market's midpoint price, and on some long-dated markets it pays a holding reward on positions. Each market page shows its daily reward pool and the conditions to earn it.

How a market resolves

When the event happens or the end date arrives, the market has to be settled. Polymarket uses UMA's Optimistic Oracle for this, and it works in a few steps:

1. A proposal. Someone proposes the outcome and puts up a bond, a deposit they lose if they are wrong.
2. A challenge window. For about two hours anyone can dispute the proposal by putting up the same bond.
3. No dispute, final. If nobody disputes, the proposed outcome stands and the market settles.
4. Disputed, a new round. A first dispute starts a fresh proposal round. If that one is disputed too, the question goes to a vote of UMA token holders, which usually takes a few days.

Every market page has its rules: what counts, what does not, and which source decides. Polymarket sometimes adds a clarification later, when a case comes up that the rules did not foresee. Those clarifications are posted on chain and become part of how the market is judged. Farsight shows each market's rules, its clarifications, the rules as they were first written, and where its resolution stands on UMA, on the market's Resolution tab.

Collecting your winnings

Once a market resolves, each winning share can be redeemed for $1 and each losing share is worth nothing. Redeeming moves the money back to your cash balance, ready to withdraw or trade again.

How to read a market before you trade

• Volume and liquidity tell you whether the price is backed by real money or by a handful of small trades.
• The spread tells you how much it costs to get in and out.
• The rules and end date tell you exactly what you are betting on and how long your money is tied up.
• The holders tell you who is on each side. A side held by traders with long records of profit is a different signal from one held by brand-new accounts.

Farsight's market pages show the largest holders of each side, how strong each side's holders are, who has won and lost the most, and an insider finder that flags new accounts and on-chain links between holders. For the strategies people use to profit from all this, read How to make money on Polymarket.

Frequently asked questions

How do Polymarket odds work?

Each outcome is a share that pays $1 if it happens. Its price in cents is the market's implied probability, so a share at 25 cents means the market sees about a 25% chance.

Can I sell my Polymarket shares before the event ends?

Yes. You can sell at any time to another trader at the current price, taking a profit or cutting a loss without waiting for the result.

Who decides the outcome of a Polymarket market?

Markets resolve through UMA's Optimistic Oracle. An outcome is proposed with a bond, anyone can dispute it during a challenge window of about two hours, and disputed outcomes can go to a vote of UMA token holders.

Why do Yes and No prices add up to $1?

Because one Yes share and one No share together are always worth exactly $1 at the end, and $1 can be split into one of each or merged back. Traders keep the two prices in line.

Does Polymarket charge fees?

Most markets have historically had no trading fee. Some market types now carry a taker fee, with part of it paid back to makers. The fee is shown before you confirm a trade.