Read the market, record your forecast and review the result.

A prediction market has a defined event and outcome rules. Prices can help describe what participants are willing to pay, but they do not make the event certain or a position profitable. Begin with a fictional event: Will the practice library open by day 10? The event, quotes and outcomes in this lesson are invented.

Suppose a displayed midpoint is US$0.50, a bid is US$0.40 and an ask is US$0.60. In this simplified exercise, the ask is the hypothetical buy quote and the bid is the hypothetical sale quote, assuming sufficient quoted size. A midpoint is neither a guaranteed purchase price nor a guaranteed sale price. The difference between bid and ask is the spread. Real executable quotes and available size can change.

For an ordinary binary contract in this teaching example, a winning share pays US$1 at resolution and a losing share pays US$0. Your own probability estimate is uncertain. If your assumed chance of the specified outcome is 0.55, the hypothetical expected terminal value is US$0.55 per share. Buying at US$0.60 with an invented US$0.01 per-share fee would cost US$0.61. The scenario's expected value minus included cost is negative US$0.06 per share. It is arithmetic using your assumption, not a recommendation or a forecast of what you would earn.

If the losing outcome occurs, the entire US$0.61 included outlay per share is lost in this simplified scenario. Additional costs or special contract rules can change a real calculation. The US$0.01 fee is invented for practice, not a Polymarket fee schedule. Actual fees are market-specific and must be checked in current official information.

Before assigning any probability, define what open means, the evidence source and what happens if evidence is missing. An event headline is not its full resolution rule. Record a reason your estimate might be wrong and choose to stay in simulation if the rules or evidence are unclear.

Polymarket International and Polymarket US have separate access and venue requirements. Checking a course page does not establish eligibility to trade. This exercise needs no platform account and teaches no restriction bypass. The Academy is independent of Polymarket.

Worked example

Fictional journal entry: Event, practice library opens by day 10; resolution definition, open to the practice public according to the invented dated notice; assumed probability, 0.55; midpoint, US$0.50; bid, US$0.40; ask, US$0.60; invented fee, US$0.01 per share; assumed expected terminal value, US$0.55; included outlay, US$0.61; scenario difference, negative US$0.06; possible losing outlay, US$0.61 per share.

Missing evidence: an actual verified opening notice does not exist because this is a teaching scenario. Decision: retain the paper exercise. No real event, quote, fee or trade is represented.

Your exercise

1. Write a precise rule for the fictional opening event and its invented evidence source.
2. Record midpoint, bid and ask separately.
3. Calculate the spread and included outlay for ten fictional shares at the ask plus the invented fee.
4. Calculate the hypothetical winning payout, losing payout and outlay lost in the losing case.
5. Change the assumed probability to 0.45 and recalculate expected terminal value minus included cost.
6. List two ways the estimate or rule could be wrong. Keep the entry as a simulation; no market action is required.

Check your work

• Every event and number is clearly fictional.
• The ask, bid and midpoint have different roles.
• The fee is not presented as a current platform rate.
• A probability estimate is a stated assumption, not a fact.
• The losing outcome and included outlay are recorded.
• International and US venue eligibility are not treated as interchangeable.
• No wallet, deposit, real position or access workaround is needed.