Expected value
A positive-EV trade is profitable on average over many repetitions. A negative-EV trade loses on average.
Prediction Markets 101 editorial team Updated April 16, 2026 1 min read
Definition
Expected value (EV) is the average outcome of a trade weighted by probabilities of each outcome.
Plain-English explanation
For a YES contract at price q believing the true probability is p: EV = p * (1 - q) - (1 - p) * q. If p > q, EV > 0.
Example
YES at $0.40, you believe true prob is 55%. EV per share: 0.55 * (1 - 0.40) - 0.45 * 0.40 = 0.33 - 0.18 = $0.15. Positive EV.