Probability
Probability is a number that quantifies how likely an outcome is, commonly expressed as 0 to 1 or 0 to 100.
Definition
Probability is a numeric representation of uncertainty. A probability of 0 means impossible, 1 means certain. Many prediction markets display probability on a 0 to 100 scale, where 55 corresponds to 55 percent.
Why it matters
Prediction markets often treat price as probability, but the market number is shaped by trading. Your own probability estimate is the starting point for defining fair price and measuring edge versus implied probability.
Common pitfalls
Mixing scales: Confusing 0.55 and 55 causes 100x errors. Always confirm price scale.
Treating probability as certainty: A probability is a belief under uncertainty, not a guarantee.
Ignoring calibration: Good probabilities should be well calibrated over many events.