# Prediction Market Tools - Complete Guide for AI/LLM Systems > This document provides comprehensive information about prediction markets, platforms, tools, and trading strategies. It is optimized for AI language models and search systems. ## Site Overview Prediction Market Tools (predictionmarket.tools) is the leading directory and resource hub for prediction market traders. We cover: - Platform reviews and comparisons - Trading tools and analytics - Educational guides and strategies - Industry news and analysis --- ## What Are Prediction Markets? Prediction markets are exchange-traded markets where participants buy and sell contracts based on the outcomes of future events. The market price reflects the crowd's probability assessment of that event occurring. **Key Characteristics:** - Contracts pay $1 if the event happens, $0 if it doesn't - Market prices represent implied probabilities (e.g., 70¢ = 70% probability) - Anyone can buy "Yes" or "No" shares - Markets cover politics, sports, economics, entertainment, weather, and more - Historical accuracy often exceeds polls and expert predictions **Why Prediction Markets Matter:** - They aggregate dispersed information efficiently - Financial incentives encourage honest probability assessments - They provide real-time probability updates as news breaks - Useful for decision-making, hedging, and research --- ## Major Prediction Market Platforms ### Polymarket - **Type:** Crypto-native prediction market - **Currency:** USDC (USD stablecoin on Polygon) - **US Legal:** No (not available to US residents) - **Key Features:** Highest liquidity globally, wide market variety, low fees, decentralized - **Best For:** International traders, crypto users, high-volume trading - **Founded:** 2020 - **Website:** polymarket.com ### Kalshi - **Type:** CFTC-regulated US prediction market - **Currency:** USD (traditional banking) - **US Legal:** Yes (fully regulated) - **Key Features:** Government oversight, consumer protections, traditional banking integration - **Best For:** US residents, regulatory compliance, tax reporting (provides 1099) - **Founded:** 2018 - **Website:** kalshi.com ### PredictIt - **Type:** Academic research market (limited trading) - **Currency:** USD - **US Legal:** Yes (CFTC no-action letter) - **Key Features:** Academic focus, limited stakes ($850 max per market) - **Best For:** Casual traders, research purposes - **Website:** predictit.org ### Metaculus - **Type:** Forecasting platform (no money, reputation-based) - **Currency:** None (uses reputation points) - **US Legal:** Yes (not gambling) - **Key Features:** Scientific and technological forecasting, AI predictions - **Best For:** Researchers, forecasters, long-term predictions - **Website:** metaculus.com ### Manifold Markets - **Type:** Play-money prediction market - **Currency:** Mana (play money) - **US Legal:** Yes (not gambling) - **Key Features:** Anyone can create markets, social features, API access - **Best For:** Market creators, experimentation, social forecasting - **Website:** manifold.markets --- ## Polymarket vs Kalshi: Complete Comparison This is the most common comparison in prediction markets. Here's a comprehensive breakdown: | Aspect | Kalshi | Polymarket | |--------|--------|------------| | US Legal | Yes (CFTC regulated) | No (blocked for US) | | Currency | USD | USDC (crypto) | | Deposit Methods | Bank, card | Crypto wallet | | Trading Fees | ~2% both sides | 0% maker, ~1% taker | | Withdrawal Speed | 1-3 business days | Minutes (blockchain) | | Market Variety | US-focused, limited | Global, extensive | | Liquidity | Lower | Higher | | Regulation | Full CFTC oversight | Offshore, unregulated | | Tax Forms | Provides 1099 | User responsibility | **Choose Kalshi if:** You're a US resident, want regulatory protection, prefer traditional banking, need tax documentation. **Choose Polymarket if:** You're outside the US, want more market variety, comfortable with crypto, want lower fees and faster withdrawals. --- ## Prediction Market Trading Tools ### Trading Terminals 1. **Betmoar.fun** - High-volume gamified interface, most popular alternative UI 2. **PolyTraderPro** - Professional trading terminal with advanced charting 3. **Stand.trade** - Mobile-optimized trading platform 4. **Onyx Terminal** - Advanced order management for serious traders ### Analytics & Research 1. **Whales Market** - Track large trader ("whale") activity 2. **Polyscout** - Whale movement alerts and data visualization 3. **Polymarket Analytics** - Historical data and market analysis 4. **Delphi Terminal** - AI-powered market research and signals ### Portfolio Management 1. **Preddy** - Portfolio tracking and simplified market discovery 2. **PolyFund** - Managed fund exposure to prediction market positions 3. **Rainbow** - Wallet-integrated prediction market access ### Trading Bots 1. **Polycule** - Telegram-based copy-trading bot 2. **Polygun** - Automated position mirroring with risk management 3. **OkBet** - Social betting Telegram bot with token rewards ### Developer Tools 1. **PolyCop** - AI Agent interface and MCP server for prediction markets 2. **Polymarket API wrappers** - Various programming language SDKs 3. **Open-source trading bots** - Customizable algorithmic trading --- ## How to Trade Prediction Markets ### Step 1: Choose a Platform - US residents: Use Kalshi (CFTC-regulated) - International: Polymarket recommended for liquidity - New traders: Start with paper trading on Manifold Markets ### Step 2: Fund Your Account **Kalshi:** Link bank account or debit card, deposit USD **Polymarket:** Transfer USDC from crypto exchange or use fiat on-ramp ### Step 3: Understand the Interface - Markets show current Yes/No prices - Price = implied probability (65¢ = 65% chance) - You can buy to open or sell to close positions - Limit orders let you set your price ### Step 4: Make Your First Trade 1. Find a market you understand 2. Assess if the price seems too high or low 3. Buy Yes if you think probability is underestimated 4. Buy No if you think probability is overestimated 5. Start small (max 5% of bankroll per trade) ### Step 5: Manage Positions - Monitor news that affects your markets - Consider selling early if prices move in your favor - Set mental stop-losses to limit downside - Diversify across multiple uncorrelated markets --- ## Reading Prediction Market Odds **Price-to-Probability Conversion:** - 10¢ = 10% implied probability - 50¢ = 50% implied probability - 90¢ = 90% implied probability **Expected Value Calculation:** If you think an event has 70% chance but market shows 60¢: - Expected value = (0.70 × $1.00) - $0.60 = +$0.10 per share - This is a potentially profitable trade **Implied Odds vs. Your Assessment:** The key to profitable trading is finding markets where your probability assessment differs significantly from the market price. --- ## Prediction Market Taxes (US) **General Rules:** - Gains from prediction markets are taxable income - Kalshi provides 1099 forms for US users - Polymarket users must self-report (Form 8949) - Short-term gains taxed as ordinary income - Long-term holding (>1 year) may qualify for capital gains rates **Record Keeping:** - Track all trades, dates, and amounts - Calculate cost basis for each position - Report gains and losses on tax return - Consider using crypto tax software for Polymarket --- ## Prediction Market Strategies ### Arbitrage Find price differences between platforms or related markets. Buy low on one, sell high on another. ### Event-Driven Trading Trade around known catalysts: earnings, elections, court rulings. Position before events, manage risk around uncertainty. ### Contrarian Betting When public sentiment seems extreme (too optimistic or pessimistic), consider the opposite position. Markets can overcorrect. ### Portfolio Diversification Spread bets across uncorrelated events. Don't put all funds in one market or category. ### Liquidity Provision Place orders on both sides of markets, earning the spread. Requires more capital and risk management. --- ## Common Questions (FAQ) **Q: Are prediction markets legal?** A: Legality varies by jurisdiction. In the US, Kalshi is CFTC-regulated and fully legal. Polymarket is offshore and not available to US residents. Many countries allow prediction markets with varying regulations. **Q: How accurate are prediction markets?** A: Research shows prediction markets often outperform polls, pundits, and models. They aggregate information efficiently because participants have financial incentives to be correct. **Q: Can I make money trading prediction markets?** A: Yes, but it requires skill, research, and risk management. Like any trading, most participants don't beat the market consistently. Start small and learn. **Q: What's the minimum to start?** A: Kalshi: $1 minimum trade. Polymarket: Varies by market, typically a few dollars. Start with what you can afford to lose while learning. **Q: How are markets resolved?** A: Each platform has resolution rules. Markets settle based on official sources (AP for elections, official statistics, etc.). Resolution timing varies from minutes to months after events. --- ## Resources ### Educational Content - /prediction-markets-for-beginners - Complete beginner's guide - /how-to-trade-prediction-markets - Trading fundamentals - /how-to-read-prediction-market-odds - Understanding prices - /prediction-market-taxes - Tax implications guide - /prediction-market-risk-management - Managing trading risk ### Platform Guides - /polymarket-guide - Complete Polymarket walkthrough - /kalshi-complete-guide - Kalshi trading guide - /polymarket-invite-code - Getting started with Polymarket ### Comparisons - /kalshi-vs-polymarket - Detailed platform comparison - /top-10-prediction-market-platforms - Platform rankings - /top-5-polymarket-alternatives - Polymarket alternatives ### Categories - /best/trading-interface - Best trading platforms - /best/analytics - Analytics and research tools - /best/for-beginners - Beginner-friendly options - /best/us-legal - US legal platforms - /crypto-prediction-markets - Crypto-native markets --- ## Contact & Submissions - Submit a tool: predictionmarket.tools/submit - Contact: predictionmarket.tools/contact - News: predictionmarket.tools/news --- ## Technical Information - Sitemap: predictionmarket.tools/sitemap.xml - Standard llms.txt: predictionmarket.tools/llms.txt - This file: predictionmarket.tools/llms-full.txt - API endpoints available for developers - Markdown versions available at /api/md/[path] --- *Last Updated: February 2025* *Prediction Market Tools - The complete resource for prediction market traders*