How to Read Election Odds

Prediction markets are exchanges where participants trade contracts based on the outcomes of future events. For elections, these contracts pay out $1 if a specific outcome occurs (like "Democrats win the Senate") and $0 if it doesn't.

The price of a contract reflects what traders collectively believe about the probability of that outcome. If a "Republican wins" contract trades at $0.65, the market is implying roughly a 65% chance of that happening.

Unlike traditional polls that sample voter intentions, prediction markets aggregate information from participants who have financial incentives to be accurate. This often makes them faster to incorporate new information and less susceptible to certain polling biases.

Implied probability is the market's estimate of an outcome's likelihood, derived directly from the contract price. The conversion is straightforward:

Note that implied probabilities from different outcomes on the same market may not sum to exactly 100% due to transaction fees and the bid-ask spread. This small difference is sometimes called the "vig" or "overround."

On Election.Market, we display prices in cents (¢) for easy reading. Here's how to interpret what you see:

The prices shown are typically the "last trade" or "mid price" (average of best bid and ask). For trading decisions, always check the actual orderbook to see available liquidity at each price level.

Unlike polls, which update weekly or monthly, prediction markets move in real-time as new information emerges. Key catalysts include:

• •New polling data – High-quality polls from reputable firms can shift odds, especially in competitive races.
• •Debates and public appearances – Strong or weak performances can move markets within minutes.
• •Endorsements – Major political endorsements, especially from popular figures, can shift probabilities.
• •Scandals or breaking news – Legal developments, leaked documents, or viral moments.
• •Candidate filings and withdrawals – Changes to who's actually running.
• •National environment shifts – Economic data, presidential approval, generic ballot movement.

Markets also move based on trading activity itself. Large "sharp money" bets from sophisticated traders can signal information that isn't yet reflected in polls or news.

When evaluating prediction market data, three metrics matter beyond just the price:

As a rule of thumb: trust odds more in markets with high volume, high liquidity, and tight spreads. Be skeptical of dramatic price moves in thinly-traded markets.

Prediction markets and polls measure different things:

Neither is inherently "better"—they're complementary. A candidate can be ahead in polls but have lower odds in prediction markets if traders expect the race to tighten. Conversely, markets sometimes lag polls if traders are slow to update.

Academic research suggests prediction markets have been slightly more accurate than poll aggregates in recent elections, but both have had notable misses. Use them together for the fullest picture.