Basis
Last reviewed 2026-08-07
Basis — definition
The cost-per-share you originally paid for a position — used to compute realized profit at settlement.
If you bought 100 YES shares at 0.42 average, your basis is $42. Settled to $100 (YES outcome) = $58 profit; settled to $0 = $42 loss.
Average basis updates with each new fill in a position.
Learn more: How prediction markets work
See also
Frequently asked questions
What does basis mean in prediction markets?
The cost-per-share you originally paid for a position — used to compute realized profit at settlement.
How does basis work in practice?
If you bought 100 YES shares at 0.42 average, your basis is $42. Settled to $100 (YES outcome) = $58 profit; settled to $0 = $42 loss.
Sources & further reading
- CFTC — Event contracts explainedU.S. Commodity Futures Trading Commission
- Kalshi — how prices and settlement workKalshi
- UMA Optimistic Oracle documentationUMA Protocol
Last reviewed 2026-08-07 · CollegePredictionMarkets.com