Expected value calculator: is the price worth it to you?
Enter the price, how likely you think the outcome is, and how many contracts. See the expected value after fees and how far your estimate is from break-even.
The contract and your estimate
Readout
Positive only if your 46% is right. The market prices this outcome near 40%.
EV = your probability × $1 × contracts − total cost
Worked example
A contract trades at 40¢ and you think the outcome is 46% likely. 100 contracts cost $40.00 plus a $1.68 fee, so $41.68 in all. If you're right, they pay $100 about 46% of the time, worth $46.00 on average. That's an expected value of +$4.32.
The break-even probability is 41.68%. Your estimate is 4.32 points above it, and that gap is all the EV there is. If your estimate is off by more than that, the EV is negative. Expected value is an average over many positions; any single contract still pays $1 or $0.
Questions
How do you calculate expected value on a prediction market?
Multiply your probability that the contract settles yes by $1 per contract, then subtract what you pay including fees. At 40¢ plus a 1.68¢ fee, a 46% estimate gives +4.32¢ per contract.
What is break-even probability?
The probability at which expected value is zero. It equals your all-in cost per contract in cents, so a contract costing 41.68¢ after fees breaks even at 41.68%.
Does positive expected value mean I will win?
No. Expected value is an average over many positions, and it depends entirely on your probability being right. A single contract still pays $1 or $0, and you can lose all of what you pay.
Where does my probability come from?
From you. The calculator does the math on whatever estimate you enter. Base rates and settlement rules can help you check whether an estimate is reasonable.
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