Implied Probability Calculator
Convert contract prices to implied probabilities, see breakeven with fees, and calculate expected value for any prediction market trade.
Results
Expected Value
Profit / Loss Table
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How Prediction Market Probabilities Work
In prediction markets, every contract represents a yes/no question about a future event. The contract price — quoted in cents from $0.01 to $0.99 — reflects the market's collective estimate of the event's probability. A contract at $0.65 means the market thinks there's roughly a 65% chance of the event happening.
If the event occurs, YES contracts pay out $1.00. If it doesn't, they're worth $0.00. Your profit is the difference between the payout and what you paid, minus any platform fees. On Kalshi, for example, you keep 93% of profits (7% fee on net gains).
The key to profitable trading is finding contracts where your estimated probability differs significantly from the market price. If you believe an event has a 75% chance of happening but the contract trades at $0.60, you have a potential edge. Use the advanced mode above to calculate exactly how much edge you have and whether the trade has positive expected value.
Understanding Breakeven Probability
Breakeven probability is the minimum true probability needed for a trade to be profitable on average. Without fees, it equals the contract price. With Kalshi's 7% profit fee, breakeven is slightly higher because fees reduce your net win. Always compare your estimated probability against the breakeven — not the raw contract price.
Frequently Asked Questions
How do you calculate implied probability from a contract price?
The implied probability equals the contract price divided by 100. A contract trading at 65 cents implies a 65% probability. This is a simplified view — actual breakeven is slightly higher when you account for platform fees.
What fees do prediction markets charge?
Kalshi charges a 7% fee on net profits (you keep 93% of winnings). Polymarket charges no explicit trading fees but has spread costs built into the order book. Always factor fees into your breakeven calculation.
What is expected value (EV) in prediction market trading?
EV is the average profit or loss per trade over many repetitions. Positive EV means a trade is profitable on average. EV = (your probability × net win) - ((1 - your probability) × cost). Use the advanced mode to calculate EV for any contract.
How do I know if a contract is a good trade?
A contract is worth trading when your true probability estimate is significantly above the breakeven probability (accounting for fees). Look for at least 5-10% edge to compensate for uncertainty in your probability estimate. The advanced EV calculator quantifies this exactly.