Prediction Market Glossary

A market where participants trade contracts that pay out based on the outcome of future events. Prices reflect the crowd's estimated probability of each outcome. Polymarket is the largest crypto-based prediction market.

A strategy where you automatically replicate the trades of another trader. When the copied trader buys or sells, the same action is executed in your account proportionally to your capital.

A trader with a large portfolio who makes significant trades. Whale movements can influence market prices and are closely watched by other traders for alpha signals.

The ease with which a position can be bought or sold without significantly affecting the price. Higher liquidity means tighter spreads and less slippage when entering or exiting positions.

The difference between the expected price of a trade and the actual price at which it executes. Slippage increases in low-liquidity markets or during high-volatility events.

An order type that must be executed in its entirety immediately or not at all. PredCopy uses FOK orders to ensure copy trades either fully execute or are cancelled, avoiding partial fills.

An order book that matches buyers and sellers based on price and time priority. Polymarket uses a CLOB powered by the CTF Exchange smart contract for all its markets.

The number of outcome tokens a trader holds in a particular market. A position represents a bet on a specific outcome (e.g., "Yes" on "Will X happen?").

A token representing a specific outcome in a prediction market. If the outcome occurs, the token pays out $1. If not, it becomes worthless. Token prices between $0 and $1 represent the market's estimated probability.

The net profit or loss from trading activity. Calculated as the difference between the current value of positions plus realized gains minus the total capital invested.

A credential that allows PredCopy to place trades on your behalf through the Polymarket API. Your API keys are encrypted with AES-256-GCM and never stored in plaintext.

Strategies and controls to limit potential losses. In copy trading, this includes max position sizes, exposure limits, stale position exits, and bid collapse detection.

The maximum total capital that can be deployed across all copied positions at any given time. This prevents a single whale's aggressive trading from risking your entire portfolio.

When buy-side liquidity suddenly disappears from an order book, causing prices to drop rapidly. PredCopy detects bid collapse scenarios and can automatically exit positions to protect capital.

The difference between the best buy (bid) and sell (ask) prices in an order book. Tighter spreads mean lower trading costs. Highly liquid Polymarket markets typically have spreads under 2 cents.

The process of settling a prediction market after the outcome is determined. When a market resolves, winning outcome tokens pay out $1 each and losing tokens become worthless.

The probability of an outcome as implied by the market price. A contract trading at $0.65 implies a 65% probability of that outcome occurring. Comparing implied probabilities across markets can reveal trading opportunities.

A token on the Gnosis Conditional Token Framework (CTF) that represents a specific outcome in a prediction market. Polymarket uses CTF tokens as the underlying asset for all its markets.

USD Coin, a stablecoin pegged 1:1 to the US dollar. Polymarket uses USDC on the Polygon network as its primary trading currency. All deposits, withdrawals, and winnings are denominated in USDC.

A Layer 2 scaling solution for Ethereum that Polymarket uses for fast, low-cost transactions. All Polymarket trades settle on Polygon, enabling near-instant execution with minimal gas fees.