Implied probability
The chance of an outcome that is implied by a price or odds quote, calculated by converting the quote into a percentage.
On a prediction market the conversion is direct: a Yes share at 30 cents implies a 30 percent chance. For sportsbook odds you convert: decimal odds of 2.50 imply 1 / 2.50 = 40 percent; American odds of -150 imply 150 / 250 = 60 percent and +200 implies 100 / 300 = 33.3 percent.
Sportsbook implied probabilities for all outcomes of one event add up to more than 100 percent. The excess is the vig, the book's margin. Prediction market prices for one event add up to roughly 100 percent, with small gaps caused by spreads.
Comparing the two tells you where the bookmaker and the crowd disagree. A team at -150 at a book (60 percent) and 54 cents on Polymarket is priced six points apart, which is either an opportunity or a sign that one venue knows something.
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Frequently asked questions
- What does "Implied probability" mean?
- The chance of an outcome that is implied by a price or odds quote, calculated by converting the quote into a percentage.
- Why does implied probability matter for prediction markets?
- Comparing the two tells you where the bookmaker and the crowd disagree. A team at -150 at a book (60 percent) and 54 cents on Polymarket is priced six points apart, which is either an opportunity or a sign that one venue knows something.