How to Trade Predictions on Polymarket
Polymarket has continued to be the standout crypto app this cycle as it has captured the public's attention during a chaotic and contentious stateside Presidential election.
The prediction market built on Polygon lets users speculate on the outcome of various events, such as elections, pop culture happenings, and sporting events, by trading shares that represent the probability of an event occurring.
The big idea? By leveraging your knowledge, you can profit from accurate predictions!
Of course, the massive ongoing excitement around the 2024 U.S. presidential election has proven to be a major tailwind in Polymarket’s recent surge.
The platform is at all-time highs when it comes to new accounts, open interest, daily active traders, and monthly volume, and its biggest markets right now — Presidential Election Winner 2024 and Democratic Nominee 2024 — boast nearly $550 million in bets between them.
Let's walk through how to make your first bets on the platform 👇
How to use Polymarket
To start exploring Polymarket yourself, you’ll first need to sign up for an account. You can do this by either providing your email address or connecting an Ethereum-compatible wallet like MetaMask or Coinbase Wallet.
Once you’ve registered and logged in, the next step is to deposit funds into your Polymarket account. The platform is centered around the popular USDC stablecoin, so you’ll want to fund your account with USDC on the Polygon network. Polymarket also offers automatic USDC conversion services for ETH and USDT depositors.
After funding your account, you can explore the wide range of available markets. Each market lists current probabilities, represented by the price of shares, which range between $0.00 and $1.00.
For instance, if a share is priced at $0.80, it implies an 80% chance of the event occurring. When the event concludes, shares of the correct outcome will be valued at $1.00 each, while incorrect outcome shares will be worth $0.00. Tread carefully!
When you find a market that interests you, purchasing shares is as simple as selecting the outcome (“Bet Yes” or “Bet No”) you believe will happen, entering the amount of USDC you want to invest, and completing the buy transaction. If your prediction proves correct when the event concludes, each of your shares will be worth $1.00, and you can redeem your winnings. Conversely, if the outcome doesn't go your way, the shares will become worthless.
It’s a gamble, so never play with funds you can’t afford to lose. That said, one of the great features of Polymarket is its flexibility, as you can sell your shares at any time before the market resolves. It doesn't have to be all or nothing. This dynamic allows you to lock in profits or minimize losses based on how the probabilities shift over time, so keep a close eye on any markets you decide to participate in.
Making Polymarket limit orders
Besides regular market orders, Polymarket allows you to use limit orders, providing even greater control over your trades. With limit orders, you can specify the exact price at which you’re willing to buy or sell shares, rather than accepting the current market price. This feature is particularly useful if you believe the market price is too high or too low at a given moment.
To place a limit order, first navigate to the market you’re interested in.
Instead of simply buying shares at the prevailing price, select the “Limit” option to place a limit order. Then in the interface you’ll enter the price you’re willing to pay and the number of shares you want to buy. Your order will then be listed in the order book, waiting to be matched by another trader willing to sell at your specified price.
This means you might not get your shares immediately, but it allows you to control the price you pay, potentially leading to better trading outcomes.
If you want to sell shares using a limit order, the process is similar. Specify the price at which you’re willing to sell and the number of shares, and your order will wait in the order book until a buyer matches your terms.
This method can help you achieve a better return on your investment by avoiding the need to sell at a less favorable market price.
Also, keep in mind that by placing limit orders that help keep the market active, you can earn liquidity rewards. Rewards are distributed based on how close your orders are to the market's average price and how large and competitive they are. Check the Rewards page to see your current earnings and the available rewards for each market.
Want to learn more about Polymarket and it's future prospects, check out our recent article!
Jack Inabinet