Polymarket is the world's largest prediction market, with over $1.5 billion in weekly trading volume. You trade on the outcomes of real-world events, elections, Fed decisions, sports, crypto prices, and more — all by using simple yes/no contracts. Polymarket was previously unavailable in the U.S. but has since made a return thanks to its acquisition of the CFTC-licensed exchange QCEX, bringing it under federal oversight.
So, how does Polymarket work? What do beginners need to know about trading event contracts? Don't worry, we've got you covered on all things Polymarket, but first it's important to use our exclusive promo code ACTIONtoDeposit $20 Get $20 Bonus, Use our Code to Skip the Waitlist!
How Polymarket Works
Every market is a yes/no question, and you buy YES or NO shares, priced between $0.00 and $1.00. That price represents the market's implied probability. For example, a YES share at $0.65 means the crowd thinks there's a 65% chance the event happens. Win, and your shares pay out $1.00 each. Lose, and they're worth $0.00.
You're not betting against a house. You're trading with other users who hold the opposite view. Your edge comes from spotting where the market's probability estimate is wrong.
Step 1: Sign Up
Tap our links to sign up with the exclusive Polymarket invite code. Then, you can sign up with your Google or Apple account to automatically create a crypto wallet. It's important to understand that your funds are non-custodial, meaning Polymarket never holds your money. You'll need to verify your identity with a government-issued ID before depositing or withdrawing.
When creating your wallet, you will need to create and save your private key. | Your private key proves ownership of your wallet. Lose it, and you could permanently lose access to your funds. Store it somewhere secure.
Step 2: Add Funds
Polymarket runs on USDC, a stablecoin pegged 1:1 to the U.S. dollar, so your balance won't swing with crypto volatility. Deposit options: debit/credit card via MoonPay (easiest for beginners), USDC from Coinbase or another exchange, or direct transfer from a crypto wallet using the Polygon network. The minimum deposit for the bonus is $20, but $50–$200 is a reasonable starting point for most traders.
Step 3: How Pricing Works
Forget point spreads. Every share is priced between $0.00 and $1.00, representing probability. YES shares at $0.72 mean the market gives the event a 72% chance of happening. NO shares on the same market cost $0.28—the two always sum to $1.00.
Here's how payouts work:
| Scenario | If You're Right | If You're Wrong |
| Buy YES at $0.72 (100 shares = $72) | Shares resolve to $1.00. You profit $28. | Shares resolve to $0.00. You lose $72. |
| Buy NO at $0.28 (100 shares = $28) | Shares resolve to $1.00. You profit $72. | Shares resolve to $0.00. You lose $28 |
Long shots pay more; favorites pay less. Your job is to find where the crowd's probability estimate is wrong.
Note that markets may also have multiple answers. For instance, if there are four teams left in the March Madness tournament, they're "Yes" contracts to win should add up to 100%.
Step 4: Place Your First Trade
Browse the Markets page by category (politics, sports, crypto, culture) or search for a topic. Start with high-volume markets as they have tighter spreads and more liquidity, making them easier to enter and exit.
- Choose your side: YES or NO.
- Set your price: What you're willing to pay per share.
- Set your quantity: Total cost is price × quantity.
- Hit Buy: Your order fills when someone takes the other side.
Use GTC (Good-Til-Cancelled) to wait for your price, or FOK (Fill-Or-Kill) to execute immediately at the current market price.
Polymarket's Order Book Explained: Seeing the Crowd in Real-Time
Most beginners just hit the "Buy" button, but looking under the hood at the Order Book can save you money.
The order book is a real-time list of every "Limit Order" placed by other traders. It shows you the Bid (the highest price someone is willing to pay) and the Ask (the lowest price someone is willing to sell for).
The displayed price you see on a market is usually the "midpoint" between these two. However, if you want to buy 1,000 shares at once, you might "eat through" the best prices and pay more than the midpoint.
The Spread: This is the gap between the Bid and the Ask.
Pro Tip: Stick to high-volume markets. In popular markets like "Next Fed Rate Cut," the spread is often less than $0.01. In obscure markets, the spread might be $0.05 or more, meaning you start at a 5% disadvantage the moment you trade.
What Are the Different Order Types at Polymarket? GTC vs. FOK
When you place a trade, you have several ways to execute it. Understanding these helps you control exactly how much you spend:
GTC (Good-Til-Cancelled): This is the default "Limit Order." You set your price (e.g., $0.45) and your order sits on the book until someone takes it or you manually cancel it. Use this if you aren't in a rush and want the best possible price.
FOK (Fill-Or-Kill): This is an "all-or-nothing" order. It tells the exchange: "Either give me all 100 shares at this price right now, or cancel my entire order." This prevents you from getting "partially filled" (e.g., only getting 5 shares when you wanted 100).
Market Order: Technically a limit order set to execute immediately against the best available prices. Use this only when speed is more important than the specific price you pay.
How to Sell Early at Polymarket
Unlike online sports betting, you're not locked in at Polymarket. If you buy YES at $0.40 and the market moves to $0.65 after a news development, you can sell immediately and pocket the difference, with no need to wait for the event to happen.
You can also cut losses early if things move against you. Track open positions in the Portfolio tab.
Some sportsbooks have early cashout policies (think bet365's early payouts), but Polymarket offers way more flexibility in the ability to exit a position early, without as many restrictions.
How Do Markets at Polymarket Resolve?
A common question for new traders is: "Who decides who won?" Polymarket uses a decentralized "truth machine" called UMA (The Optimistic Oracle) to ensure outcomes are fair and cannot be rigged by the platform.
The Request: Once an event occurs, a resolution is proposed based on the specific "Resolution Rules" listed in the market description.
The Challenge Period: There is a "liveness period" (usually 2 to 24 hours) where anyone can dispute the result by posting a bond.
The Vote: If a dispute happens, thousands of independent UMA token holders vote on the outcome. If you are ever unsure about a result, you can check the "Activity" tab to see the evidence being used for resolution.
Polymarket Fees: What Are They?
One of the biggest draws of Polymarket is its low-cost structure, which means you won’t see a percentage taken out of each trade or a flat fee when moving funds on or off the platform. However, that doesn’t mean trading on Polymarket is completely free.
Instead of charging explicit fees, Polymarket operates using a market-based pricing system where costs are built into the spread, or the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. This is known as the bid-ask spread, and it effectively acts as an indirect trading cost, usually landing within the range of 0.01% – 0.75%.
In highly liquid markets with lots of activity, spreads tend to be tight, meaning the cost to enter and exit positions is relatively small. But in lower-volume markets, spreads can widen significantly, increasing the hidden cost of trading.
It’s also worth noting that while Polymarket itself doesn’t charge platform fees, users may still encounter minor blockchain-related costs depending on how they fund their accounts or move assets. You can find more information on Polymarket's fee schedule here.
How to Cash Out on PolyMarket
Hit Withdraw, send USDC to a wallet or exchange, convert to dollars, and transfer to your bank. On-chain transfers complete within minutes; bank transfers take one to three business days.
A quick reminder, every trade is a taxable event. Polymarket doesn't issue tax documents, so be sure to keep your own transaction log and consult a tax professional.
How Do I Earn Rewards at Polymarket?
Polymarket actually pays users to provide liquidity. Through its "Maker Rebate" and "Liquidity Rewards" programs (which are similar to Kalshi incentive programs), the platform distributes USDC daily to traders who help keep the markets active.
To earn these rewards, you don't just "bet"—you "market make." By placing Limit Orders (GTC) close to the current midpoint, you are providing "depth" to the market. Polymarket tracks how long your orders stay active and how close they are to the actual price.
The Benefit: High-volume traders can often offset their trading costs—or even turn a small profit—just from these daily USDC distributions, regardless of whether their actual trades win or lose.
Where to find it: Look for the "Rewards" or "Incentives" icons on specific markets (like major sports or crypto price markets) to see which ones are currently paying out.
Is Polymarket Legal?
Yes!
Polymarket operates as a prediction market platform in all 50 states, allowing users to trade on the outcomes of real-world events.
In 2022, Commodity Futures Trading Commission (CFTC) reached a settlement with Polymarket over operating an unregistered derivatives trading platform. As part of that agreement, Polymarket restricted access for U.S.-based users and paid a civil penalty. Since then, the platform has made a return thanks to CFTC approval but is available on a limited basis.
It’s also important to note that regulatory scrutiny around prediction markets is ongoing. As governments and financial regulators continue to evaluate platforms like Polymarket, the legal landscape could change quickly.
Quick Tips for Polymarket Beginners
- Start small. Spread your first $100 across several markets to learn how things move.
- Read the resolution criteria. Every market has specific rules for how it settles. Make sure to read them before you buy.
- Think in probabilities. Don't just ask "will this happen?" Instead, ask "Is the market mispricing the odds?" That's your edge.
- Remember, you can sell early. Lock in gains when a market moves your way.
The Bottom Line on How Polymarket Works
Polymarket rewards informed thinking. Prices are set by other traders, not a house, which means there's a genuine edge for anyone willing to do their homework. You can get started with $20 in under 30 minutes. Trust us, the learning curve flattens fast once you're in. And remember, new users who register with our exclusive promo code ACTIONget this welcome offer: Deposit $20 Get $20 Bonus, Use our Code to Skip the Waitlist!
Now that you know how Polymarket works, check out this beginner's guide to Kalshi.
