What Is a Contract Price?
Prediction markets express contract prices as either probabilities or cents, but they are the same thing. A 54% probability corresponds to a price of 54¢ per contract. For simplicity this calculator will use cents.
A contract at 75¢ pays $1.00 if it settles yes (wins) and $0 if it settles no (loses). Prediction markets typically charge a trading fee resulting in you paying more per contract than what's listed. You might end up paying over 76¢ per contract when the listed price is 75¢.
What Is a Prediction Market Odds Converter?
A contract price converter takes the listed price and determines the actual contract price, then converts it to your desired odds format. This allows you to compare a prediction market's contract price listed without fees to a sportsbook's American odds.
What True Odds Means
True odds is the actual odds you are getting on your trade once all fees are accounted for.
How the Math Works
Example: You trade $100 at 75¢, and the position pays $130 if it wins.
Step 1. Calculate the Adjusted Contract Price
\[
\begin{aligned}
\text{Adjusted Contract Price} &= \dfrac{\strut \text{Cost}}{\strut \text{Payout}} \times 100 \\
&= \dfrac{\strut 100}{\strut 130} \times 100 = 76.92 \text{ cents}
\end{aligned}
\]
The prediction market listed 75¢. You actually paid 76.92¢ per contract.
Step 2. Calculate the True Odds
\[
\begin{aligned}
\text{True Odds (decimal)} &= \dfrac{\strut \text{Payout}}{\strut \text{Cost}} \\
&= \dfrac{\strut 130}{\strut 100} = 1.30 \ \text{Decimal}\text{, or } -333 \ \text{American}
\end{aligned}
\]
Step 3. Calculate the Fee
\[
\begin{aligned}
\text{Fee} &= \text{Cost} - (\text{Payout} \times \text{Contract Price}) \\
&= 100 - (130 \times 0.75) \\
&= 100 - 97.50 = \$2.50
\end{aligned}
\]
The fee is the difference between what the trade would have cost on a fee-free market and what you actually paid.
Why the Calculator Asks Where You Traded
When trading in dollars most prediction markets do not display how many contracts you are buying. Prediction markets also handle fees differently. Some only charge on a win and others charge when you make the trade. This makes it ambiguous how many contracts you are actually buying. Selecting the prediction market you are trading on tells the calculator if the fees are on the trade or a commission on your winnings.
The difference can add up quickly. On the trade above it is $2.50 against $3.33, and on a 50¢ contract the two answers are double one another.
\[
\begin{aligned}
\text{Fee on the cost side} &= \text{Cost} - (\text{Payout} \times \text{Price}) = \$2.50 \\[6pt]
\text{Fee on the payout side} &= \dfrac{\strut \text{Cost}}{\strut \text{Price}} - \text{Payout} = \dfrac{\strut 100}{\strut 0.75} - 130 = \$3.33
\end{aligned}
\]
On a payout side venue your $100 buys 133.33 contracts that should settle at $133.33, and the $3.33 difference is withheld from your payout.
Shares Mode Does Not Need the Venue
When you enter the number of contracts, the ambiguity disappears. The share count allows the calculator to determine the fee.
Example: 100 contracts bought at 58¢ for a cost of $59.71, paying out $100 on a win.
\[
\begin{aligned}
\text{Fee} &= \text{Shares} \times (\$1 - \text{Price}) - (\text{Payout} - \text{Cost}) \\
&= 100 \times 0.42 - (100 - 59.71) \\
&= 42.00 - 40.29 = \$1.71 \\[6pt]
\text{Adjusted Contract Price} &= 59.71 \text{ cents} \\[6pt]
\text{True Odds} &= -148
\end{aligned}
\]
When the Fee Is a Rebate
A fee can be negative, which means you are getting paid to make that trade. Rebates occur on prediction markets that pay a maker rebate for posting an order rather than taking one off the book. If you see a rebate, the trade earned you money on execution instead of costing you.
Reading the Ticket Against a Sportsbook
Once you have true odds, the trade is directly comparable to any sportsbook line. An adjusted contract price that converts to -333 is the same as a sportsbook price of -333. To compare sportsbook's odds to contract prices, use the Odds Converter.
