Dual Markets

A dual market is a market where people can trade contracts that pay based on the outcomes of unknown future events. The market prices generated from these contracts can be understood as a kind of collective prediction among market participants. These prices are based on individual expectations and the willingness of investors to put their money on the line for those expectations.

In its most common form, a dual market is similar to a financial market for binary outcome. People can buy and sell predictions about a particular event occurring, e.g. X candidate winning the election. An example will help to clarify the dual market concept. Consider a contract that pays $1 if Candidate X wins the presidential election. If the market price of an X contract is currently 66 cents, this means that the candidate is 66% likely to win the election. If a trader buys $1 at this price and the candidate wins the election, that share will be paid out at $1.5 (1/0.66), yielding a profit of 50 cents. On the other hand, if the candidate loses the election, the same share will cost $0 and the trader will have lost $1. In figure 1 we can see the candidates X and Y probabilities through time based on the trading in the prediction market. Obviously, probabilities always add up to 100%, and the probability of Y candidate equals 1- the probability of X candidate.

To take a position on a Dual market select first the market

Select the desired outcome and the collateral you are looking to trade

You can see the potential winnings/ROI and the total fees of the transaction

After you click “Take position” a pop up will appear with a summary of the transaction

When the transaction is recorded after a few seconds on the blockchain you will receive confirmation