Implied Probability

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Implied probability is the likelihood of an outcome inferred from the market price of a contract rather than from a model or a stated forecast. For a contract that pays $1.00 on a YES outcome, a price of $0.32 implies a probability of roughly 32%, subject to fees. On ForecastEx a YES and a NO together cost $1.01 rather than $1.00 because of a one cent fee per pair, so implied probabilities read off the two sides sum slightly above 100%, and this small wedge should be accounted for when comparing market prices against independent third-party probability estimates.

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