# Prediction-market glossary — Front of Goal

## The basics

**Prediction market** — A market where you trade contracts that pay $1 if a real-world event happens and $0 if it does not. The price is the market's collective probability estimate. A contract trading at $0.62 means traders think the event has a 62% chance.

**Polymarket** — The largest prediction market by volume. Runs on Polygon, settles on-chain, denominates everything in pUSD (a 1:1 USD-pegged token). Front of Goal routes orders to Polymarket and earns a builder fee on the volume we send.

**CLOB** — Central Limit Order Book. The same matching engine model used by stock exchanges: every buy and sell sits at a price level, and crossing orders match. Polymarket's CLOB is what you trade against here.

**Outcome token** — An ERC-1155 token issued by Polymarket's conditional-tokens contract. One token per possible outcome. The winning outcome's tokens redeem for $1; the losing ones for $0.

**Implied probability** — Price expressed as a percentage. A $0.41 contract has a 41% implied probability. When prices for all outcomes in a market sum above $1, the gap is the spread.

## Reading prices

**Bid** — The highest price someone is currently willing to buy at. If you sell at market, this is what you get.

**Ask** — The lowest price someone is currently willing to sell at. If you buy at market, this is what you pay.

**Spread** — Ask minus bid. A two-cent spread on a $0.50 contract is wide; a half-cent spread is tight. Tight markets are cheaper to enter and exit.

**Midpoint** — The average of the bid and the ask. The site's price displays use the midpoint when it exists; otherwise the last trade.

**Depth** — How many shares sit at each price level. Deep books absorb large trades without moving the price; thin books move on every order.

**Tick size** — The minimum price increment, $0.01 on Polymarket V2. You cannot place a buy at $0.503; round to $0.50 or $0.51.

## Order types

**Limit order** — Buy or sell at a specific price or better. If the market never reaches your price, the order does not fill.

**Market order** — Take whatever is on the book right now. Fills immediately, but you pay the spread and any slippage if your size exceeds top-of-book depth.

**GTC (Good Til Cancelled)** — Sits on the book until it fills or you cancel. Default for resting limit orders.

**FOK (Fill or Kill)** — Either fill the entire order at the limit price or cancel it. No partial fills.

**FAK (Fill And Kill)** — Fill what is available at the limit price, cancel the rest. Useful for taking the top of the book without leaving a resting order.

## Market structure

**Binary market** — Two outcomes, Yes and No. "Will Liverpool win the Premier League?" is binary.

**Categorical market** — Three or more mutually exclusive outcomes. A 3-way moneyline (home / draw / away) is categorical.

**Negative-risk market** — A categorical market built from binary children where exactly one wins, like a tournament-winner with 32 teams. Polymarket settles these through the NegRiskAdapter, which mints and merges position tokens efficiently.

**Outright** — A market on a season or tournament outcome, not a single match. Examples: Premier League winner, World Cup top scorer, La Liga relegation.

**Open interest** — The total dollar value of contracts currently held by traders. Higher open interest means a larger pool of money committed to the market.

**Volume** — The total dollar value traded in a window, not the value held. Volume can be much larger than open interest if the market churns. The 30-day volume on every page is rolling.

## How wallets work here

**Non-custodial** — Front of Goal never holds your funds or your private key. Every trade is signed by your wallet; we forward the signature to Polymarket. If we disappeared tomorrow, your money would still be on Polygon under your control.

**Magic** — An email-and-Google sign-in that creates a self-custodial wallet without a seed phrase. Convenient, fast, and the keys can be exported any time. Built on Polygon for low gas.

**Deposit wallet** — A small smart-contract wallet Polymarket deploys for each Magic user. Holds your pUSD, batches operations gaslessly through the builder relayer, and is owned by your Magic key.

**Safe** — A Gnosis Safe smart wallet, used by some imported Polymarket accounts. Multi-sig capable, more flexible, but operations cost gas unless routed through the builder relayer.

**Builder fee** — A small fee Polymarket pays third-party frontends for the volume they route. Front of Goal's fee is 0.5%, attached to every order. The user pays the same all-in price either way; the fee comes from Polymarket's existing taker spread, not on top.

## Trading concepts

**Kelly criterion** — A bet-sizing formula that maximizes long-run growth. If your edge is small, Kelly says bet a small fraction; if your edge is large, bet a large fraction. The trade modal computes Kelly when you enter your own probability estimate.

**Edge** — The gap between your probability estimate and the market price. Buying a $0.40 contract on something you think is 50% gives you a 10-point edge.

**Vig** — The cumulative spread across all outcomes in a market. On a soccer 3-way moneyline, the prices of home, draw, and away might sum to $1.04 instead of $1.00. The 4 cents is the vig.

**Slippage** — The difference between the price you saw and the price you got. Caused by depth running out or the market moving between click and fill.

Full page with navigation: https://frontofgoal.com/glossary/