Prediction Markets FAQ
1. What is a prediction market?
A prediction market is a specialized trading market where participants buy and sell contracts based on the probability of future events. Unlike traditional financial markets, the core value of a prediction market lies in aggregating the knowledge and judgment of many participants through market pricing, thereby forming a collective forecast of the likelihood of an event.
In a prediction market, prices represent the market's consensus on the probability of an event occurring. For example, if the "YES" price of an event is $0.65, it means the market believes there is approximately a 65% chance that the event will occur. If the event ultimately happens, users holding "YES" shares will profit. If it does not happen, users holding "NO" shares will profit.
MEXC Prediction Markets combine this mechanism with cryptocurrency trading to provide users with an efficient and transparent trading environment. Whether you are following crypto industry trends, macroeconomic indicators, or breakthroughs in technology, you can find corresponding trading opportunities on MEXC Prediction Markets.
2. What does a 65% "YES" probability mean?
A "YES" price of 65 cents means the market consensus believes the event has a 65% chance of occurring. If you buy "YES" at 65 cents and the event happens, it settles at $1, giving you a net profit of 35 cents. If the event does not happen, it goes to zero and you lose 65 cents. The "NO" price is approximately 35 cents, representing the probability that the event will not occur.
3. What does $1 per share mean?
The maximum value of each share is fixed at $1. The correct outcome settles at $1, while the incorrect outcome settles at $0. For example, if you buy at 50 cents and your prediction is correct, you earn 50 cents. If your prediction is wrong, you lose 50 cents. This structure is simple and intuitive, making it easier for users to evaluate potential returns and risks through probability-based thinking.
4. How is the price determined?
Prices are determined in real time by user buying and selling activity through an order book mechanism similar to that of traditional exchanges. Buying demand pushes prices higher, while selling supply pushes prices lower, collectively forming the market consensus probability. As a centralized exchange, MEXC provides an efficient matching engine to ensure a smooth and transparent price discovery process.
5. How do I place a trade?
Log in to your MEXC account and go to the Prediction Markets page. Select the market you're interested in, then choose either "YES" or "NO" based on your prediction. Enter the amount you want to trade, select a market or limit order, and then confirm your order.
MEXC Prediction Markets support both fiat and cryptocurrency deposits, and the process is similar to MEXC Spot trading, making it easy for users to get started.
6. Can I sell my position before the event ends?
Yes. As long as the market has not yet settled, you can sell your position on MEXC at any time to lock in profits or cut losses promptly. Orders are matched in real time, and funds are released quickly without waiting for the event to end.
7. What is the difference between a market order/limit order?
A Market Order is executed immediately at the best available market price. It offers faster execution, but slippage may occur.
A Limit Order allows you to set your target price and will be executed automatically when the market reaches that price. It offers better price control, but immediate execution is not guaranteed.
MEXC's high-performance matching engine ensures that both order types can be executed efficiently.
8. Can I cancel my orders?
Yes. Unfilled Limit Orders can be canceled at any time in Open Orders, and the frozen funds will be released back to your available balance immediately.
Once a Market Order is submitted, it is executed immediately and cannot be canceled. If a Market Order is partially filled, only the unfilled portion can be canceled.
9. Is there a minimum deposit or trading amount?
Please refer to MEXC platform announcements for the latest minimum deposit and trading requirements for Prediction Markets. As a leading centralized exchange, MEXC supports multiple funding methods, including cryptocurrency and fiat, with relatively low entry barriers for different types of users.
10. How are markets settled?
Once the event outcome is confirmed, MEXC settles the market based on credible data sources. Shares of the correct outcome are paid out at $1, while shares of the incorrect outcome are worth $0. As a centralized exchange, MEXC is responsible for ensuring that the settlement process is fair, transparent, and efficient.
11. What happens if a market is canceled or voided?
If a market is canceled due to special circumstances, MEXC will void all related trades and fully refund users based on their purchase price. No one will make a profit or incur a loss as a result. MEXC will notify users through an announcement before the market is canceled to ensure transparency.
12. How long does it take to receive my payout after settlement?
As a centralized exchange, MEXC offers faster payout processing. Once settlement is confirmed, funds are usually credited within a short period of time directly to your MEXC account, where they can immediately be used for other trades or withdrawals.
13. What are the risks of participating in prediction markets?
The main risks of participating in prediction markets include:
- Market risk: Incorrect judgment may result in trading losses
- Volatility risk: Prices may fluctuate sharply as new information emerges
- Settlement risk: The final result may differ from expectations, or the market may be canceled due to special circumstances
As a regulated centralized exchange, MEXC provides a secure and stable trading environment. However, users are still encouraged to participate rationally and allocate funds appropriately based on their own risk tolerance.
14. Do I need to sign up for an account or complete KYC Verification?
To participate in MEXC Prediction Markets, users need to sign up for an account. KYC verification is not mandatory to access the relevant features.
For users who have not completed KYC verification, access may be restricted in certain regions to ensure compliance.
To unlock more account features, users can submit valid identity documents and complete KYC verification at any time. The verification process is simple and can usually be completed within minutes.