Glossary
Last reviewed 2026-08-07
At a glance
This glossary defines the prediction-market terms you’ll meet on Kalshi and Polymarket — from YES shares and spreads to settlement and resolution sources.
Every term we use when we cover prediction markets. Each entry leads with a one-sentence definition, then expands. Linked from every relevant market and explainer.
A
B
C
- Categorical marketA market with more than two mutually-exclusive outcomes — e.g. which candidate wins, or which school takes the top ranking.
- CFTCThe Commodity Futures Trading Commission — the US regulator that oversees Kalshi and other licensed event-contract exchanges.
- ContractA single tradable unit on a prediction-market exchange — usually one YES or NO share with a $1 max payout.
D
E
F
H
I
K
L
- Last tradeThe price at which the most recent share changed hands. Can be stale in low-volume markets.
- Limit orderAn order to buy or sell only at a specified price or better. Will not fill if the market doesn't reach your price.
- LiquidityHow easily you can buy or sell shares without moving the price. Deeper books = tighter spreads + lower slippage.
M
- Market makerA trader or firm that continuously posts both bids and asks, earning the spread in exchange for providing liquidity.
- Market orderAn order to trade immediately at whatever prices are currently available on the book.
- Mid priceThe midpoint between the best bid and best ask — the standard reference price quoted in tickers and dashboards.
N
O
- Open interestThe total dollar value of contracts currently held by traders that have not yet settled.
- OracleThe party — human, on-chain, or hybrid — that reads the resolution source and posts the official market outcome.
- Order bookThe list of all resting limit orders on both sides of a market, organized by price.
P
R
S
- Scalar marketA market that resolves to a number on a continuous range rather than a yes/no — e.g. final SAT score or acceptance rate.
- SettlementThe process of paying out a resolved market: YES holders receive $1 per share, NO holders receive $0 (or vice versa).
- ShareCommon shorthand for one prediction-market contract. Pays $1 if your side wins, $0 if not.
- SharpA consistently profitable trader. Their orders are often the ones moving market prices closer to truth.
- SlippageThe difference between the price you expected to trade at and the price you actually got.
- SpreadThe gap between the best bid and best ask price on a market. Smaller spread = cheaper round-trip cost.
V
W
Y
Sources & further reading
- CFTC — Event contracts explainedU.S. Commodity Futures Trading Commission
- Kalshi — how prices and settlement workKalshi
- UMA Optimistic Oracle documentationUMA Protocol