Guide 3 of 6 · Trading
Trading basics
Everything you need to place your first trade with confidence: how shares work, the two order types, and the market mechanics that affect the price you actually get.
Yes and No shares
Every market asks a yes-or-no question: "Will X happen?" Two kinds of shares exist:
- Yes shares pay $1.00 each if the event happens, $0 if it doesn't.
- No shares pay $1.00 each if the event doesn't happen, $0 if it does.
The price of a Yes share is the market's probability estimate. At 62¢, the crowd says there's a 62% chance. Buy Yes at 62¢ and you're risking 62¢ to make 38¢ — the market thinks you'll lose more often than you win, so the payout compensates you when you're right.
Placing your first trade
- Pick a market you understand. Subject-matter knowledge beats chart-watching at this stage.
- Read the resolution rules at the bottom of the market page — they define exactly what counts as Yes. Ambiguity here is where beginners get burned.
- Choose your side: Yes if you think it happens, No if you don't.
- Choose an order type (see below), enter an amount, and confirm.
- Watch your position. You can sell back at any time before resolution to lock in gains or cut losses.
Limit vs. market orders
- Market order: buys immediately at the best available price. Fast and simple, but in thin markets you may get a worse price than displayed.
- Limit order: you set the maximum price you'll pay. It only fills at your price or better — but it might not fill at all if the market moves away.
💡 Tip: beginners should prefer limit orders. They protect you from accidentally buying at a bad price during a fast-moving news moment.
Spread and liquidity
Two concepts decide how much trading actually costs you:
- Spread — the gap between the best buy and sell prices. A 2¢ spread on a 50¢ share is a 4% round-trip cost before you've made a single good call.
- Liquidity — how many shares are available near the current price. Deep markets absorb your trade without moving the price; thin markets shift against you.
Big, popular markets (major elections, big games) usually have tight spreads and deep liquidity. Niche markets can be expensive to trade — check both before committing real money.
When to sell
You never have to hold until resolution. Common approaches:
- Take profit early — your Yes shares bought at 40¢ are now 75¢ after good news. Selling locks in the gain without waiting for the event.
- Cut losses — the thesis broke. Selling at 20¢ recovers something instead of riding to zero.
- Hold to resolution — simplest, but your money is locked up until the event concludes and the market resolves.
⚠️ The beginner trap: buying at 90¢+ because an outcome "feels certain." You're risking 90¢+ to make under 10¢ — one surprise wipes out nine wins. Price always matters more than confidence.
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