Short answer
On Polymarket, a share's price in cents is read as traders' estimate of an outcome's probability. Winning shares redeem for $1 after resolution, and losing shares pay nothing. Takers pay a fee that is highest near 50 cents. Each market's written rules decide how it settles. In 2026, US appeals courts split on whether states can regulate these contracts.
- What a price means The price is read as the market's odds, set by users trading.
- How payouts work Winning shares redeem for $1. Losing shares pay nothing.
- Who decides Written market rules decide. UMA disputes can go to a token-holder vote.
- What to watch Appeals courts are split on state power. New York has sued Polymarket US.
Last checked
Key facts
| Winning share payout (Polymarket) | $1 per share; losing shares worthless |
| UMA proposer bond / challenge window | Typically $750 pUSD / 2 hours |
| Polymarket taker fee formula | fee = shares x feeRate x p x (1 – p), p = price; makers pay nothing |
| Kalshi maker fee formula (where charged) | 0.0175 x contracts x price x (1 – price), rounded up |
| Kalshi CFTC DCM designation | November 4, 2020 |
| Appeals court split on state power | Third Circuit (2-1) for Kalshi, April 6, 2026; Ninth Circuit (Aug. 28) and Sixth Circuit (Sept. 25, 2026) for the states |
What does a share price actually mean?
On Polymarket, a share's price is read as the market's estimate of the probability of an outcome. The documentation says the price "directly represents the market's belief in the probability of that outcome." So when the screen shows 37% for Yes, traders are pricing roughly a 37% chance that the event happens. That number reflects what traders are willing to pay. It is not a forecast by the platform or by anyone else.
Polymarket does not set prices. They come from a central limit order book, where users post bids to buy and asks to sell. The figure shown on screen is the midpoint between the best bid and the best ask. That gap is called the spread. If the spread is wider than 10 cents, Polymarket shows the last traded price instead. That trade could be old, so a wide spread usually signals a thin market and a stale figure.
The displayed number and the price you actually get can differ. Buyers pay the ask and sellers receive the bid. In the documentation's example, the bid is $0.34 and the ask is $0.40. The screen shows 37%, but a buyer would pay 40 cents and a seller would get 34 cents.
| Order book situation | What Polymarket displays | What a trader pays or receives |
|---|---|---|
| Spread of 10 cents or less (e.g. bid $0.34, ask $0.40) | Midpoint (37%) | Buyer pays the ask ($0.40); seller receives the bid ($0.34) |
| Spread wider than 10 cents | Last traded price | Still the current bid or ask, which may differ from the display |
How do payouts and collateral work?
Every Yes share has a matching No share, and together they are fully backed. When a $0.60 Yes order matches a $0.40 No order, the two sides create one complete set backed by 1 pUSD (the dollar-pegged collateral token Polymarket uses). That is why the Yes and No prices in a binary market add up to about $1.
After a market resolves, holders of winning tokens can redeem them for $1 each, and losing tokens become worthless. The arithmetic follows directly. A buyer who pays 60 cents for Yes stands to gain 40 cents per share before fees if Yes wins, and to lose the full 60 cents if it does not. The lower the price, the larger the potential gain per dollar and the lower the implied chance of collecting it.
With fees: a taker buying Yes at $0.60 in a crypto market (rate 0.07) also pays a fee of 0.07 x 0.60 x 0.40 per share. If Yes wins, each share redeems for $1, so the net gain is 40 cents per share minus that fee. A No result means a loss of 60 cents per share plus the fee. Fees push the break-even probability slightly above the price paid.
Who decides the outcome?
The headline on a market does not decide how it settles. Each Polymarket market has its own written resolution rules, covering the data source, the end date and edge cases. When an event is ambiguous, those rules govern the result.
For markets resolved through UMA, the process is propose-and-challenge. A proposer posts a bond, typically $750 pUSD, and states the outcome. Then comes a 2-hour challenge window, during which anyone can dispute it. If a proposal is disputed twice, the question goes to UMA's Data Verification Mechanism, a vote of UMA token holders. Debate runs 24-48 hours and the vote about 48 hours, so a contested market can take several days to settle.
Before trading, read the market's rules text on its page: the named data source, the end date and how edge cases are handled. If the rules are unclear, that is a resolution risk in itself.
- First, a proposer posts a bond (typically $750 pUSD) and proposes an outcome.
- Next, a 2-hour window opens for anyone to dispute.
- After two disputes, UMA token holders debate for 24-48 hours, then vote over about 48 hours.
How much do fees cost?
Polymarket charges fees only to takers, meaning traders whose orders fill immediately against existing orders. Makers, who post orders that wait in the book, are never charged. The formula is shares x feeRate x p x (1 – p), where p is the price.
The p x (1 – p) part is largest when the price sits in the middle of its range. So fees peak near 50 cents and shrink as prices approach 0 or $1. Under the 0.04 politics rate, a trade near 50 cents carries a noticeably higher fee per share than the same trade near $1. Fees cost the most where outcomes are most uncertain.
Worked example, politics (rate 0.04): a taker buying at $0.60 pays shares x 0.04 x 0.60 x 0.40 in fees. Near $1, the (1 – p) factor approaches zero, so the fee per share shrinks toward nothing. Before confirming, compare the fee on the order ticket with this calculation. Posting a resting order that waits in the book avoids the fee entirely.
Kalshi charges a transaction fee tied to the expected earnings on a contract, according to its help center. Resting (maker) orders pay only if they execute, and cancellations are free. Its fee schedule gives the maker fee, on markets that carry one, as 0.0175 x contracts x price x (1 – price), rounded up. That is the same price-curve shape Polymarket uses.
For example, a resting order at $0.40 that executes on a market with maker fees costs 0.0175 x contracts x 0.40 x 0.60, rounded up. This applies only on markets that carry maker fees. Check the market page to see whether maker fees apply.
| Polymarket category | Taker fee rate |
|---|---|
| Crypto | 0.07 |
| Sports | 0.05 |
| Politics | 0.04 |
| Finance | 0.04 |
| Geopolitics and world events | 0 (fee-free) |
Is it legal where I live?
The answer depends on the platform, the country and, in the US, the state. It is being actively litigated.
Availability: Polymarket, Polymarket US and Kalshi are not open in every country or every US state. Access rules differ by platform and can change, so check each platform's terms and your local law first.
Kalshi took the federal route early. The Commodity Futures Trading Commission (CFTC) designated KalshiEX LLC as a designated contract market (DCM), the federally regulated exchange category, in November 2020. Polymarket took a different path. In January 2022, its operator, Blockratize Inc., settled CFTC charges of offering off-exchange event-based binary options without registration and paid a $1.4 million civil penalty, according to The Block.
Polymarket bought CFTC-licensed exchange QCEX for $112 million in July 2025, according to Decrypt. It began rolling out a regulated US app to waitlisted users in early December 2025, starting with sports contracts.
The current dispute is between the federal government and the states. At its core is whether sports event contracts listed on a CFTC-regulated exchange are swaps under the Commodity Exchange Act, which would override state gambling law, or gambling that states can regulate. Three appeals courts have split. The Third Circuit sided with Kalshi against New Jersey in a 2-1 decision. In Kalshi's Nevada case, the Ninth Circuit sided with the states, as did a unanimous Sixth Circuit panel covering Ohio and Tennessee.
Al Jazeera reported that the split could reach the Supreme Court. CFTC Chairman Michael Selig has said the agency must defend its "exclusive jurisdiction" over these markets, according to CoinDesk.
New York has opened a separate front. On Sept. 24, 2026, the state's attorney general and governor sued QCX LLC (Polymarket US). They allege it runs an unlicensed gambling operation and lets 18-20-year-olds trade. These are allegations, not court findings. The state seeks an injunction, restitution and fines of three times gains.
Outside the US, Polymarket's international platform restricts access by location. Iran, Syria, Cuba, North Korea and occupied Crimea, Donetsk and Luhansk are fully blocked. Dozens of other places, including the US, UK, France, Germany, Australia and Singapore, are close-only, meaning users there can only close existing positions. Orders from blocked regions are rejected.
| Date | Event |
|---|---|
| Nov. 4, 2020 | CFTC designates KalshiEX LLC as a DCM |
| Jan. 3, 2022 | Polymarket settles CFTC charges, pays $1.4 million |
| Jan. 17, 2025 | Kalshi receives amended order allowing intermediated (FCM) trading |
| May 2025 | CFTC moves to drop appeal in Kalshi congressional-control case; D.C. Circuit later dismisses |
| July 2025 | Polymarket acquires QCEX for $112 million |
| Sept. 3, 2025 | CFTC staff issue no-action letter on certain QCX reporting and recordkeeping rules |
| Nov. 24, 2025 | CFTC approves amended designation for QCX LLC (Polymarket US) |
| Early Dec. 2025 | Polymarket US app opens to waitlisted users, starting with sports |
| April 6, 2026 | Third Circuit (2-1) blocks New Jersey from enforcing gambling laws against Kalshi sports contracts |
| Aug. 28, 2026 | Ninth Circuit rules against Kalshi in Nevada case |
| Sept. 24, 2026 | New York sues QCX LLC (Polymarket US) |
| Sept. 25, 2026 | Sixth Circuit rules Ohio and Tennessee can regulate Kalshi contracts |
What is not confirmed, and what should readers watch?
Several points could not be verified as of Oct. 24, 2026. The sources reviewed list no scheduled hearings or decision dates, so readers should treat the items below as open questions rather than a calendar.
Disclaimer: This article is for general information only and is not financial, legal or investment advice. We do not recommend buying, selling or trading on any platform, and prediction market trading can lose money.
- Kalshi's official fee schedule was checked for the maker-fee formula (0.0175 x contracts x price x (1 – price), rounded up). Its taker formula is not stated here because it was not confirmed from a primary source.
- No Supreme Court petition in the Kalshi state cases was found.
- The status of a Fourth Circuit (Maryland) Kalshi ruling was not found.
- Sources conflict on exactly which categories and states Polymarket US now covers.
- The New York lawsuit is at the allegation stage, and no court has ruled on its claims.
FAQ
What does a share price mean on Polymarket?
It is read as the market's estimate of the chance the outcome happens. A display of 37%, for example, means traders put the odds near 37%. Each share redeems for $1 if the outcome occurs. Otherwise, the share is worth nothing.
Is the price shown the price I pay?
Not necessarily. Polymarket displays the midpoint of the bid and ask, but buyers pay the ask and sellers receive the bid. If the spread exceeds 10 cents, the screen shows the last trade instead.
Who decides how a prediction market resolves?
Each market's written rules decide. On Polymarket markets that use UMA, a proposer posts a bond and anyone can dispute within 2 hours. Two disputes send the question to a UMA token-holder vote.
Are prediction markets legal in the US?
It depends on the state and is being litigated. Kalshi is a CFTC-designated contract market, but federal appeals courts have split on whether states can apply gambling laws to sports event contracts.
Can people outside the US use Polymarket?
Access depends on location. Some countries are fully blocked, and others, including the UK, France, Germany, Australia and Singapore, are close-only, according to Polymarket's documentation. Check local rules before signing up.
Sources
- Polymarket Docs – Prices & Orderbook
- Polymarket Docs – Resolution
- Polymarket Docs – Fees
- Kalshi Help Center – Fees
- CFTC Press Release 8302-20 (Kalshi DCM designation)
- New York AG press release on Polymarket lawsuit
- Al Jazeera – Sixth Circuit Kalshi ruling
- CoinDesk – Third Circuit Kalshi ruling
Figures change. Check the primary sources below.