How does Polymarket work? Shares, prices, fees, resolution and payouts, with a worked example

Guide · Updated November 4, 2026 · 18+ · Not legal, tax or financial advice · By BetG8 Editorial · Prediction Markets

How does Polymarket work? Shares, prices, fees and payouts — A share that pays $1 or nothing, priced in cents on an order book. Everything else is detail.

Short version: Polymarket is an exchange where every market is a yes-or-no question. You buy Yes or No shares at a price between 1 and 99 cents; the price is the probability the market assigns to that outcome. When the question is settled, winning shares pay $1 each and losing shares pay nothing, and you can sell at any time before that at whatever the order book will pay. The exchange charges a taker fee only, which is zero on geopolitics, 4 percent of the share price times one minus the price on politics and finance, and up to 7 percent on crypto, so a trade at 50 cents costs the most. There are two Polymarkets: the international exchange at polymarket.com, which settles in a dollar token on the Polygon blockchain and does not serve US residents, and Polymarket US, a separate CFTC-designated exchange. This guide describes how both work as of November 2026. It is not legal, tax or financial advice.

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What a Polymarket share actually is

Every market on Polymarket is a binary condition with two outcomes, Yes and No. Buying a Yes share is buying a claim that pays $1 if the condition occurs and nothing if it does not; a No share is the mirror image. Because exactly one of the two must pay, a Yes share and a No share together are always worth exactly $1, and the exchange enforces that mechanically: when a Yes buyer at 60 cents is matched with a No buyer at 40 cents, their $1 of combined collateral is locked and a complete pair of shares is created and handed to them. On the international exchange the shares are ERC-1155 tokens on Polygon and the collateral is pUSD, Polymarket’s own dollar token, backed one to one by USDC (Polymarket docs: markets and events; pUSD).

Markets are grouped into events. “Who will win the Texas Senate race?” is an event; “Will the Democrats win?” and “Will the Republicans win?” are markets inside it. When an event’s markets are mutually exclusive, Polymarket links them as a negative-risk group, which means exactly one market in the group resolves Yes and every other one resolves No. That is the structure behind the multi-candidate pages, and it is why buying No on five candidates in a six-candidate race is economically the same as buying Yes on the sixth. The practical point for a new user is that the thing you own is always a share in one binary market, never a share in “the event.”

How the price is set

Polymarket runs a central limit order book. Buyers post bids, sellers post asks, and a trade happens when the two meet. The number shown on a market page is the midpoint of the best bid and best ask, or the last traded price if the spread is wider than 10 cents, so a market quoted at 37 cents might have a 34-cent bid and a 40-cent ask behind it (Polymarket docs: prices and order book). Read as a probability, 37 cents means the market thinks the event is 37 percent likely; read as a bet, it means you risk 37 cents to win 63.

Every order is technically a limit order. A “market” order is a limit order priced to cross the book immediately, so it fills at the best available ask and, for a large order, at progressively worse prices as it eats through the resting liquidity. A limit order below the ask rests in the book until someone trades into it or you cancel it, and it may fill in part. Matching happens off-chain on Polymarket’s servers and settlement happens on-chain, which is why a fill is near-instant but the tokens appear in your wallet a few seconds later. There is no minimum order size in the documentation, but thin markets move a long way on a small order, and the spread is the first fee you pay, before any explicit one; our guide to the spread shows how much.

A worked example: $40 on Yes at 40 cents

Suppose a politics market has Yes offered at 40 cents and you buy 100 shares by taking that ask. The shares cost $40. Because you took liquidity, you also pay the taker fee for the politics category, which is 100 shares multiplied by a rate of 0.04 multiplied by 0.40 multiplied by 0.60, or 96 cents, paid in collateral rather than shares. Your total outlay is $40.96.

Scenario	Cash out	Profit or loss	Return on $40.96
Market resolves Yes	100 × $1.00 = $100.00	+$59.04	+144%
Market resolves No	$0.00	−$40.96	−100%
Sell all 100 at 55¢ before resolution (taker)	$55.00 − $0.99 fee = $54.01	+$13.05	+32%
Sell all 100 at 30¢ before resolution (taker)	$30.00 − $0.84 fee = $29.16	−$11.80	−29%

Three things fall out of the table. First, the break-even probability on this trade is not 40 percent but 40.96 percent, because the fee is sunk whether you win or lose; at 40 cents the fee moves your hurdle by about one point, and it is worst at 50 cents, where it moves it by a full point on each side. Second, selling early is a second taker trade with its own fee, calculated at the new price, so round-tripping a position costs two fees unless you rest limit orders instead. Third, if you had posted a 40-cent bid and waited for a seller to hit it, you would have paid no fee at all, and under the maker rebate programme you would have been paid a share of the taker’s fee. Patience is priced on Polymarket, and the price is roughly one percent of the stake at the middle of the range.

The fee schedule by category

For most of its history Polymarket charged no trading fee. As of November 2026 it charges takers only, using the same shape of formula Kalshi uses: fee = shares × rate × price × (1 − price). The rate depends on the market’s category, fees are paid in collateral and rounded to five decimal places, and a share of every taker fee is paid back to the market makers on the other side of the trade (Polymarket docs: fees).

Category	Taker rate	Fee per 100 shares at 50¢	Fee per 100 shares at 10¢ or 90¢	Maker rebate share
Geopolitics	0	$0.00	$0.00	–
Politics, finance, tech, mentions	0.04	$1.00	$0.36	25%
Sports	0.05	$1.25	$0.45	15%
Economics, culture, weather, other	0.05	$1.25	$0.45	25%
Combos (multi-leg)	0.05	$1.25	$0.45	0%
Crypto	0.07	$1.75	$0.63	20%

The formula is symmetric, so a trade at 30 cents and a trade at 70 cents cost the same, and both cost less than a trade at 50. Expressed as a percentage of the stake, the politics rate is 1 percent at 50 cents, 0.4 percent at 10 cents and 0.04 percent at 90 cents, which is why a long-shot buyer barely notices the fee and a favourite buyer notices it even less, while the person trading a coin flip pays the most. For a side-by-side with Kalshi, whose single rate of 0.07 applies across categories, see Kalshi versus Polymarket fees, or run your own numbers in the prediction market fee calculator.

Deposits, pUSD and withdrawals

On the international exchange you do not deposit dollars; you deposit USDC, or another token that Polymarket’s bridge converts, and it is wrapped into pUSD, an ERC-20 token on Polygon with six decimals that the smart contract backs one to one with USDC. Winnings are paid in pUSD and unwrapped to USDC when you withdraw. Polymarket charges nothing to deposit or withdraw, but the network you send from, and any card or exchange you buy the USDC through, may (Polymarket docs: pUSD). Our deposits guide walks through the routes and what each one costs.

Polymarket US works differently. It is an intermediated exchange in the US regulatory sense: QCX LLC, the CFTC-designated contract market Polymarket bought for $112 million in July 2025, runs the market, customers come through a futures commission merchant, and accounts are funded in dollars rather than tokens (Blockworks). The app launched on December 3, 2025 for users aged 18 and over (Bloomberg via Yahoo Finance). Its prices and fees are set by the US entity and can differ from the international book, and the app can switch off whole categories, most often sports, in states that have objected; our US legality page tracks which.

Resolution: how the $1 gets paid

A share only pays when the market resolves, and on Polymarket that is done by an outside oracle rather than by the company. Most markets use UMA’s Optimistic Oracle. Once the event has happened, anyone can propose an outcome by posting a bond, typically $750, and the proposal stands if nobody disputes it within two hours, at which point the market resolves and winning shares become redeemable for $1 each. If someone disputes, they post a matching bond and a new proposal round begins; if that is disputed too, the question goes to a vote of UMA token holders that takes about 48 hours, so a contested market takes four to six days to settle. The loser of a dispute forfeits half their bond to the winner. In the rare case where voters decide the question cannot be answered, the market pays 50 cents per share to both sides (Polymarket docs: resolution).

Two exceptions matter. Short-dated crypto up-or-down markets do not use UMA at all; they compare a Chainlink time-weighted price at the start with one at the end and resolve mechanically. And Polymarket can publish “additional context” to clarify a market’s wording, but the docs say it cannot change the question’s fundamental intent. The rule text on the market page is the contract, and the disputes that make headlines almost always come from a gap between what traders assumed and what that text says. How prediction markets resolve covers the famous cases.

What this guide does not cover

It does not cover tax, which depends on where you live and whether you trade on the international exchange or the US one; it does not cover the on-chain mechanics of self-custody wallets beyond what you need to understand a trade; and it does not cover whether any given market is a good price, which is a judgement no guide can make for you. The fee schedule, the $750 bond and the two-hour window are the figures in Polymarket’s documentation as of November 2026 and the company changes them without much notice, so check the live pages before relying on a number here. Nothing on this page is a recommendation to open an account or to trade.

Frequently asked questions

How does Polymarket work in simple terms?

Each market is a yes-or-no question. You buy Yes or No shares priced between 1 and 99 cents on an order book; the price is the market’s implied probability. When the question is settled, winning shares pay $1 each and losing shares pay nothing. You can also sell before resolution at the current price.

What are Polymarket’s fees?

As of November 2026 only takers pay a fee, calculated as shares × rate × price × (1 − price). The rate is 0.07 for crypto, 0.05 for sports and most other categories, 0.04 for politics, finance, tech and mentions, and zero for geopolitics. At 50 cents that is $1.75, $1.25 and $1.00 per 100 shares. Makers pay nothing and receive rebates.

How are Polymarket markets resolved?

Most markets use UMA’s Optimistic Oracle. Anyone can propose an outcome by posting a bond, typically $750. If nobody disputes within two hours the market resolves. A dispute requires a matching bond and starts a new round; a second dispute goes to a vote of UMA token holders, so a contested market can take four to six days.

Can Americans use Polymarket?

The international exchange at polymarket.com has blocked US users since a January 2022 CFTC settlement. Polymarket US is a separate, CFTC-designated exchange operated by QCX LLC, acquired for $112 million in July 2025, with an app launched in December 2025 for users aged 18 and over. Availability of some market categories varies by state.

What is pUSD?

Polymarket USD is the collateral token for trading on the international exchange. It is an ERC-20 token on Polygon backed one to one by USDC and created when you deposit; winnings are paid in it and it unwraps back to USDC on withdrawal. Polymarket charges no deposit or withdrawal fee, though networks and card providers may.