Predicted Probability
A predicted probability is your probability estimate for an outcome, expressed on a 0 to 1 or 0 to 100 scale.
Definition
A predicted probability is your estimate of how likely an outcome is. In prediction markets, you compare your estimate to the implied probability embedded in the market price.
Why it matters
Prediction markets look simple because price resembles probability. But a price is not your belief, it is a tradable number shaped by liquidity, bid ask spread, and fees. Your predicted probability is the clean baseline you control.
How to use it
• Convert your probability into a fair price on the same scale.
• Compare it to the implied probability from the market.
• Check the break even probability once costs are included.
• Track outcomes and evaluate calibration with Brier score.
Common pitfalls
Mixing scales: Always confirm price scale before converting.
Ignoring costs: Small edges disappear after fees and spread.
False precision: 0.63 is still an estimate, not a fact.