Frequently Asked Questions
Answers to the most common questions about prediction markets, trading strategies, platforms, and analytics tools.
Prediction Market Basics
What is a prediction market?
A prediction market is an exchange where participants trade contracts whose payoff depends on the outcome of a future event. Prices reflect the collective probability estimate of the crowd. For example, if 'Will the Fed cut rates?' trades at $0.35, the market collectively estimates a 35% probability. Prediction markets operate on platforms like Polymarket (decentralized, crypto-based) and Kalshi (CFTC-regulated, US-based).
How do prediction markets work?
Traders buy and sell shares in binary outcomes (Yes or No). Each share pays $1 if the outcome occurs and $0 if it does not. The share price between $0 and $1 represents the implied probability. For instance, buying a Yes share at $0.60 means you pay $0.60 and receive $1 if the event happens — a $0.40 profit. If it does not happen, you lose your $0.60.
Are prediction markets legal?
Legality varies by jurisdiction. Kalshi is CFTC-regulated and available to US residents for certain event contracts. Polymarket operates outside the US and is not available to US persons. Other platforms like PredictIt operated under a CFTC no-action letter that has since expired. The regulatory landscape is evolving, with several countries developing frameworks for prediction market regulation.
How accurate are prediction markets?
Prediction markets have been shown to outperform polls, expert panels, and statistical models for many types of forecasts, particularly binary political outcomes and economic events. Their accuracy comes from aggregating diverse information through financial incentives — traders with better information or analysis profit, which pushes prices toward the true probability.
What is the difference between a prediction market and gambling?
Prediction markets and gambling both involve risk, but prediction markets serve a price discovery function — they aggregate information to produce probability estimates that have real forecasting value. Additionally, prediction markets allow continuous trading (you can exit a position before resolution), support sophisticated strategies beyond simple bets, and the pricing is determined by peer-to-peer supply and demand rather than a house-set line.
What is a binary market?
A binary market is a prediction market that resolves to one of exactly two outcomes — typically Yes or No. The price of a Yes share represents the implied probability of the event occurring. Binary markets are the most common format on platforms like Polymarket and Kalshi.
Trading on Polymarket
How do you make money on Polymarket?
There are several ways to profit on Polymarket: (1) Buy underpriced shares and hold until resolution — if you correctly identify a mispriced market, you profit the difference between your entry price and $1. (2) Trade the price movement — buy low and sell higher before resolution as new information shifts probabilities. (3) Market making — provide liquidity on both sides of the order book and capture the bid-ask spread. (4) Arbitrage — exploit price differences between platforms or related markets.
What is a whale trade in prediction markets?
A whale trade is a large-size transaction, typically $10,000 or more, that can move market prices significantly. On 0xInsider, whale trades are tracked in real time across Polymarket, Kalshi, and Probable Markets. These trades often indicate informed or institutional capital flowing into specific outcomes and can serve as signals for other traders.
What trading strategies work on Polymarket?
The most common profitable strategies include: market making (providing liquidity for spread capture), accumulation (gradually building large positions at favorable prices), event-driven trading (positioning around known catalysts), directional trading (conviction bets on specific outcomes), and swing trading (capturing multi-day price movements). 0xInsider classifies traders into strategy types using ML-powered pattern detection.
How do I analyze a prediction market trader's track record?
Key metrics to evaluate include: profit factor (ratio of gross wins to gross losses), Sharpe ratio (risk-adjusted returns), equity smoothness (consistency of the P&L curve), max drawdown (largest peak-to-trough decline), win rate in context of position sizing, and category concentration. 0xInsider provides 40+ quantitative metrics for every tracked trader profile.
What is the Kelly Criterion and how does it apply to prediction markets?
The Kelly Criterion is a formula for optimal position sizing: f* = (bp - q) / b, where b is the odds, p is your estimated probability, and q = 1-p. In prediction markets, it determines what fraction of your bankroll to risk on a given trade based on your edge. Most successful traders use fractional Kelly (25-50% of the calculated amount) to reduce variance while maintaining positive expected growth.
How do I spot insider trading on Polymarket?
Warning signs include: large trades placed shortly before market-moving events, unusual trading patterns from previously inactive wallets, coordinated buying across multiple wallets, and significant edge (difference between entry price and resolution price). 0xInsider's Insider Radar system automatically flags suspicious trades using ML-powered analysis of timing, size, and behavioral patterns.
Platform Comparisons
What is the difference between Polymarket and Kalshi?
Polymarket is a decentralized prediction market built on Polygon (crypto-based, not available to US persons), while Kalshi is a CFTC-regulated exchange available to US residents. Polymarket generally has higher volume and more market variety, while Kalshi offers regulatory certainty and traditional financial infrastructure. Both platforms offer binary event contracts.
What is the difference between Polymarket and Metaculus?
Polymarket is a real-money trading platform where you buy and sell outcome shares for profit. Metaculus is a forecasting platform where participants predict probabilities without risking money. Polymarket measures collective belief through financial incentives, while Metaculus tracks individual and crowd forecasting accuracy over time. They serve different purposes — Polymarket for trading, Metaculus for calibration and forecasting research.
Is Polymarket better than sports betting?
They serve different purposes. Prediction markets like Polymarket have no house edge (peer-to-peer trading), cover a wider range of events (politics, crypto, science, not just sports), and allow sophisticated strategies like market making. Sports betting has higher liquidity for popular events, simpler interfaces, and established regulatory frameworks. For traders seeking analytical edge, prediction markets often offer better opportunities.
What prediction market platforms are available?
Major platforms include Polymarket (crypto-based, highest volume), Kalshi (CFTC-regulated, US-available), Metaculus (forecasting, no real money), Manifold Markets (play money with real-money features), and Probable Markets (newer entrant). 0xInsider tracks Polymarket, Kalshi, and Probable Markets for whale trade and trader analytics.
Analytics & Tools
What is 0xInsider?
0xInsider is the trading terminal for prediction markets. It provides real-time whale trade tracking, signal scoring, insider radar (suspicious trade detection), and institutional-grade analytics for 7,000+ trader profiles across Polymarket, Kalshi, and Probable Markets. The platform processes 26M+ trades and computes 40+ quantitative metrics per trader.
How does 0xInsider's trader grading system work?
0xInsider grades traders from S (top performers) to F using six weighted dimensions: profit magnitude, Sharpe ratio, capital efficiency, profit factor, max drawdown, and consistency. Each score passes through Bayesian shrinkage so traders with thin histories are penalized until they prove their edge with sufficient volume. The system currently grades 1,200+ qualified wallets.
What is signal scoring for whale trades?
Signal scoring is 0xInsider's 25-point system that evaluates each whale trade based on size, trader track record, market timing, and contextual factors. Higher signal scores indicate trades from more reliable sources with stronger conviction. The score helps traders quickly identify which whale trades are most likely to contain genuine information.
How does Insider Radar detect suspicious trades?
Insider Radar uses ML-powered analysis to flag trades that exhibit patterns consistent with insider trading: unusual timing relative to market-moving events, abnormally high edge (difference between entry and resolution price), coordinated wallet activity, and behavioral anomalies. Each flagged trade receives a suspicion score and detailed analysis of the specific signals triggered.
Can I track my own Polymarket performance on 0xInsider?
Yes. Search for any Polymarket username or wallet address on 0xInsider to see a full analytics profile: P&L history, win rate, Sharpe ratio, profit factor, strategy classification, category performance breakdown, and 30+ other quantitative metrics. All data is computed from on-chain trading history.
What data does 0xInsider track?
0xInsider processes on-chain data from Polymarket, Kalshi, and Probable Markets. This includes: every trade (entry, exit, size, price), positions and their mark-to-market values, market resolution outcomes, whale trades above $10K, trader behavioral patterns, and market metadata. The analytics database contains 40+ tables covering traders, markets, trades, positions, rankings, and ML classifications.