Prediction markets let traders buy and sell event contracts tied to real-world outcomes.
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By Ekaterina Drozdovica
A market price can often be read as the market’s implied view of how likely an event is to happen. For example, if a contract is trading at $0.40, that can suggest the market sees roughly a 40% chance of that outcome – though prices can move as new information comes in.
This guide breaks down the main prediction market types, including sports, politics, economic events, culture, and climate, and explains what traders typically look at in each category.
This article is for informational purposes only and should not be construed as financial or investment advice. Past performance does not guarantee future results.
Main prediction market types
Prediction markets cover many real-world events, from sports and politics to economic releases.
The basic contract structure is similar across categories, but the data, rules, and settlement sources can vary. As traders react to new information, market prices can turn those views into real-time probability signals.
Sports prediction markets
Sports prediction markets allow users to trade a contract on the outcome of professional and collegiate athletic events. Traders can buy contracts on outcomes in football, basketball, hockey, baseball, soccer, and many other sports.
Sport event contracts work differently from sports betting – prices move as traders buy and sell event contracts in response to new information. Those prices are often read as the market’s implied view of how likely an event is to happen. Sports betting, on the other hand, works through bookmaker-set odds, which can include an embedded margin.
There is a wide range of sport categories available at OG.com prediction markets, the biggest include:
Basketball
Pro Basketball (M); Pro Basketball (W)
Baseball
Pro Baseball; College Baseball
Soccer
EPL; La Liga; Bundesliga; Serie A; Ligue 1; MLS; Liga MX; Champions League; UEFA Europa League; English FA Cup; World Cup; Soccer Friendlies; Brazilian Serie A
Political prediction has a long and established history. The Iowa Electronic Markets, for example, have tracked election markets for more than 30 years. In one study, Iowa Electronic Markets prices were closer to final election outcomes than traditional polls in 74% of direct historical comparisons.
Prediction markets allow trading on event outcomes like U.S. presidential elections, control of Congress, Senate or House outcomes, government shutdown markets, major appointments, policy deadlines, global elections, and geopolitical crisis or conflict markets.
Economics and financial prediction markets focus on macro data, central bank decisions, and other market-moving events. Traders can buy event contracts tied to various data releases. Market prices can move to reflect how expectations are changing in real time.
Here are some common economic events used in event contracts:
Consumer Price Index (CPI)
Monthly inflation data that tracks changes in consumer prices.
Gross Domestic Product (GDP)
A measure of economic growth, often tracked against a stated target or forecast.
Jobs Reports
Monthly employment data, such as payroll growth, job creation, or the unemployment rate.
Central Banks
Central bank decisions on whether to raise, cut, or hold interest rates steady. This includes decisions by the Federal Reserve (Fed), Bank of England (BoE), European Central Bank (ECB), Bank of Japan (BoJ), and Bank of Canada (BoC). |
Unemployment Rate
The share of the labor force that is unemployed and actively looking for work.
In financial prediction markets, traders can trade contracts tied to currencies, indices, and other financial assets. These contracts usually ask whether an asset will reach, close above, or close below a specific price by a set deadline.
For example, event contracts related to all major currency pairs are popular on prediction markets as well as indices such as Nasdaq 100, S&P500, and others.
Corporate prediction markets focus on company-specific events that can be clearly verified.
These can include product launches, earnings-related milestones, leadership changes, production numbers, delivery volumes, or subscriber growth. Instead of trading the underlying stock, traders can take a view on a specific company event or data point.
Settlement usually depends on objective sources, such as U.S. Securities and Exchange Commission filings, annual reports, or verified company announcements. That makes the contract rules especially important – traders need to know exactly what outcome counts and which source will be used to confirm it.
These can include award winners, music chart rankings on Spotify, reality TV contest winners, top video games, and even film scores on Rotten Tomatoes. Traders use event contracts to take a view on how a cultural moment may play out
Settlement depends on official sources – ceremony results or verified data from recognized providers. It’s important to check the rules before trading.
Environmental and scientific prediction markets focus on measurable outcomes in climate, weather, and technology. These can include daily temperature highs, rainfall totals, hurricane landfalls, or space launch timelines.
Settlement depends on clear data sources and objective measurement. Weather and climate markets may use official sources such as the National Oceanic and Atmospheric Administration (NOAA), while space-related markets may rely on NASA mission reports or other verified launch data.
The main types include sports, political, economics, financials, corporate, culture, environmental, and scientific prediction markets. Each category groups event contracts based on the specific real-world outcomes being traded, such as election results or weather data.
How do event contracts work?
An event contract is a tradable derivative that settles based on the outcome of a future event. If the prediction is correct, the contract typically pays $1.00; otherwise, it settles at zero.
What are political prediction markets used for?
These markets aggregate diverse information to forecast the likelihood of election winners, policy changes, and legislative milestones. Because traders risk capital, the resulting price often provides a more accurate probability estimate than traditional polling methods.
Can users trade contracts on economic indicators?
Yes, economics prediction markets allow for trading on outcomes like inflation rates, GDP growth, and unemployment data. These markets provide real-time signals on how the public expects macroeconomic conditions to shift before official reports are released.
Important Information: Prediction is an event contract that is a derivatives product offered by North American Derivatives Exchange, Inc. (NADEX), a CFTC-regulated exchange, which does business under the brand OG.com Prediction Markets (OG) Crypto.com | Derivatives North America and uses a CFTC-regulated exchange that uses OG.com technology.
Trading on OG.com involves risk and may not be appropriate for all. By trading you risk losing your cost to enter any transaction, including fees. You should carefully consider whether trading on OG.com is appropriate for you in light of your investment experience and financial resources. Any trading decisions you make are solely your responsibility and at your own risk
