01.Trading terms
These appear the moment you place your first order.
- Implied probability — the market price read as a likelihood. A contract at 34c implies roughly a 34% chance the event happens.
- Spread — the gap between the highest bid and the lowest ask. You pay it on entry and again on exit.
- Depth — how much volume rests at each price level. It determines what a position actually costs, unlike the headline price.
- Slippage — the difference between the price you saw and the average price you got, caused by your order filling through deeper levels.
- Market order — fills immediately against resting orders, at whatever price the book offers.
- Limit order — posts at a price you choose and waits. No fill is guaranteed, but you may earn the spread rather than pay it.
- Maker and taker — a maker posts a resting order and adds liquidity; a taker crosses the spread and removes it.
02.Market structure
How a market is put together, and why two similar-looking questions can behave very differently.
- CLOB — central limit order book. The matching engine that pairs buyers and sellers, as opposed to an automated market maker.
- YES and NO shares — the two sides of a binary market. They are the same trade from opposite directions, and their prices sum to roughly a dollar.
- Binary market — a market with exactly two outcomes. Most Polymarket markets are binary.
- Multi-outcome market — several mutually exclusive outcomes, whose prices should sum to about a dollar across all of them.
- Liquidity — how much can be traded without moving the price. Low liquidity means a price that carries little information.
- Market maker — a participant quoting both sides continuously, earning the spread in exchange for providing liquidity.
03.Resolution
How a market decides who was right. This is where most disputes and most avoidable losses originate.
- Resolution criteria — the precise written conditions determining the outcome. This is the contract; the market title is not.
- Resolution source — the specific authority whose report settles the question. Ambiguity here causes most disputes.
- Optimistic oracle — a resolution mechanism where a proposed outcome is accepted unless challenged within a window.
- UMA — the protocol providing the optimistic oracle Polymarket uses for resolution.
- Challenge window — the period during which anyone can dispute a proposed outcome by posting a bond.
- Dispute — a formal challenge to a proposed resolution, escalating the question to a token-holder vote.
- Settlement — the final payout, where winning contracts pay a dollar and losing contracts pay nothing.
04.The on-chain layer
Terms you only need if you are building, but which explain why Polymarket has the tool ecosystem it does.
- Conditional tokens (CTF) — the token standard representing outcome shares, which is what lets positions live in your own wallet.
- USDC — the dollar-denominated stablecoin Polymarket settles in.
- Polygon — the network Polymarket settles on.
- Self-custody — holding positions in a wallet you control, rather than as a balance held by an operator.
- Gamma API — the endpoint for market and event discovery and metadata.
- Data API — the endpoint for a wallet's positions, holdings and trade history.
- Subgraph / indexer — a service that indexes on-chain events into a queryable API, used for historical data.
- Whale — a wallet trading unusually large size. Public on-chain positions are why whale tracking exists here and not on conventional exchanges.