How YES and NO Contracts Work

Every binary prediction contract has two sides:

• YES — pays $1.00 if the event occurs
• NO — pays $1.00 if the event does not occur

Because exactly one side pays out, YES + NO should always be worth about $1.00 on the same platform. If YES trades at $0.60, NO should trade near $0.40. When they drift apart on the same platform, that's an internal arbitrage. When the equivalent of YES on one platform is cheap relative to the equivalent of NO on another, that's a cross-platform gap — what GapWatch scans for.

Reading prices as probabilities

A price of $0.43 is shorthand for "the market thinks there is about a 43% chance." Prices move constantly as news arrives and traders reprice.

The two-leg structure

A cross-platform arbitrage always has two legs:

1. Buy YES (event happens) on the platform where it is cheap.
2. Buy NO (event does not happen) on the platform where it is cheap.

If the sum is under $1.00, one of your two contracts pays $1.00 at settlement and your combined return is 1.00 / combined cost − 1 — minus fees, slippage and any risk that the contracts don't resolve identically.