Prediction Markets for Beginners: What They Are, Where to Start
New to prediction markets? Start here. Plain English explanation, step-by-step first trade, which platform to choose, and the three rules that actually matter.
Last checked 3 October 2026
Quick answer
A prediction market is an exchange where you buy and sell yes-or-no contracts on real events, such as an election, an economic number or a game. Each contract is priced between 1 cent and 99 cents and pays $1 if the event happens and nothing if it does not, so the price works as the market's estimate of the probability. You can sell before the event if the price moves.
In the US, these exchanges are regulated by a federal agency, the Commodity Futures Trading Commission (CFTC). For most beginners, Kalshi is the easiest place to start: it runs on the web and in apps, lists markets well beyond sports, and has a $10 minimum deposit. Polymarket US suits iPhone users, ProphetX suits sports traders, and OG (by Crypto.com) is a fourth regulated option. Start with $10 to $25 you can afford to lose, and read each market's rules before you trade.
| At a glance | 3 October 2026 |
|---|---|
| What you buy | Yes-or-no contracts priced from 1¢ to 99¢; pays $1 if right, $0 if wrong |
| Who regulates the exchanges | The CFTC (federal), which designates each exchange as a "designated contract market" |
| Best first platform for most people | Kalshi (web, iOS and Android; $10 minimum deposit) |
| Minimum age | 18 at Kalshi, Polymarket US, ProphetX and OG (we recommend 21+); 21 at Novig |
| Where sports contracts are blocked by court order | Kalshi only, in Michigan, Nevada and Washington (other Kalshi markets stay open there) |
| Biggest open question | Whether states can regulate sports contracts: federal appeals courts are split and three Supreme Court petitions are pending; none has been granted |
What is a prediction market?
A prediction market lists questions with a yes-or-no answer and a settlement date. Typical questions: Will the Federal Reserve cut rates at its next meeting? Will a named candidate win a primary? Will a team win tonight's game?
For each question you can buy YES or NO. Prices sit between 1 cent and 99 cents. When the question is settled, every correct contract pays $1 and every wrong one pays $0.
Example. You buy one YES contract at 65 cents.
- The event happens: the contract pays $1.00. Your gain is 35 cents, minus fees.
- The event does not happen: the contract pays $0. You lose the 65 cents you paid, plus fees.
The most you can lose on a contract is what you paid for it plus fees.
How prices work: price = implied probability
The price is the market's estimate of how likely YES is:
| YES price | What the market is saying |
|---|---|
| 72¢ | About a 72% chance of YES (28% chance of NO) |
| 50¢ | A coin flip |
| 5¢ | A long shot |
Prices move all the time as traders react to news. You do not have to wait for the result: if you bought YES at 40 cents and it now trades at 65 cents, you can sell and take the gain. If the news goes against you, you can sell early and lose less. To make money over time you need to judge a probability better than the market does, after fees. That is harder than it sounds. Our guide how to read prediction market odds covers the maths in more detail.
The other side of every trade is another trader, not the exchange. The exchange matches buyers and sellers and earns a fee. For the full comparison with a sportsbook, see prediction markets vs sports betting.
What can you trade?
Categories differ by platform. At Kalshi, for example, they include sports, elections and politics, entertainment and culture, tech and science, "mention" markets, commodities, climate and weather, economics and finance. Polymarket US, ProphetX, OG and Novig each list their own mix; ProphetX and Novig centre on sports (straight trades, live trades and parlays), and OG adds crypto, FX, commodity and index markets.
If you are new, start with a topic you already follow closely. Knowing a subject well is the only real edge a beginner has.
Are prediction markets legal in the US?
Every platform in our starter list below is a CFTC-designated exchange. Kalshi has been designated since 4 November 2020, Polymarket US (QCX LLC) since 9 July 2025, ProphetX since 11 June 2026 and Novig (Ludlow Exchange, LLC) since 16 June 2026; OG runs on North American Derivatives Exchange, Inc. (NADEX), a designated contract market.
The open question is sports contracts. Several states say they are gambling under state law. Federal appeals courts are split on sports event contracts, all at the preliminary-injunction stage: the Third Circuit sided with Kalshi (6 April 2026), the Ninth (28 August 2026) and Sixth (25 September 2026) sided with the states, and three Supreme Court petitions (Nos. 26-299, 26-338, 26-344) are pending; none has been granted.
What that means for you today, as of 3 October 2026:
- Kalshi must block sports contracts by court order in three states: Michigan, Nevada and Washington. Its other markets stay open there.
- Polymarket US and ProphetX are not offered in Nevada. Novig is not offered in Arizona, Michigan or Nevada.
- For Kalshi, in 25 states, including New York, California and Illinois, the platform is open but a lawsuit, enforcement action or appeals ruling is pending ("Available — dispute pending" on our state pages).
- In the other 22 states plus D.C., including Texas and Florida, we found no state action ("Available"). Other platforms differ in a few states (for example, OG does not offer sports contracts in eight states), so check the platform's row on your state page.
We use four status words on every state page: Available; Available — dispute pending; Sports contracts blocked by court order; Not offered. They describe access, not a legal ruling, and they can change. Check your state on our US legal tracker. This guide is general information, not legal advice.
Which platform should a beginner start on?
Ranked for beginners (ease of use, range of markets, devices), as of 3 October 2026. Each platform's minimum age and fees come from its own help pages.
| # | Platform | Best for | Devices | Minimum age | Trading fee (short form) |
|---|---|---|---|---|---|
| 1 | Kalshi | Most beginners: widest mix of markets | Web, iOS, Android | 18 (we recommend 21+) | Fee charged when your trade fills; shown before you confirm |
| 2 | Polymarket US | iPhone users | iPhone app only | 18 (we recommend 21+) | Since 1 Oct 2026: price-based taker fee (highest near 50¢, ~$1.74 per 100 contracts); maker rebate |
| 3 | ProphetX | Sports traders | Web, mobile app | 18 (we recommend 21+) | 2% of net winnings per market on straight trades |
| 4 | OG (by Crypto.com) | Sports and politics, plus crypto, FX and index markets | Web, mobile app | 18 (we recommend 21+) | Fee when you open or close a position; price-based on most markets; none at settlement |
| 5 | Novig | Sports traders who are 21+ | Mobile app, web | 21 | Pre-game straight trades free; live, futures and parlays pay a price-based taker fee |
Pick one platform and stay with it for your first 20 to 30 trades, so you learn one order screen well.
1. Kalshi: best first platform for most people
Kalshi (KalshiEX LLC) has been a CFTC-designated exchange since 4 November 2020. It works on the web and in iOS and Android apps, and covers economics, weather, politics and culture as well as sports, so you can start with a subject you know. Minimum deposit $10; bank transfer (ACH) deposits are free and withdrawals are free. Kalshi's minimum age is 18; we recommend 21+. Kalshi review.
Offer: Trade $25 and Get $25! Code RANKPREDICTS (use our link or the code). The welcome offer covers 47 states plus D.C. (not Michigan, Nevada or Washington). Claim the Kalshi offer
Certain limitations apply. The offer is available to new users only, subject to the terms and conditions at kalshi.com/tc/500. 18+ only. Restrictions and eligibility requirements apply. Event contract trading involves significant risk and is not appropriate for everyone. Please carefully consider if it is appropriate for you in light of your personal financial circumstances. Kalshi products are not available in all jurisdictions. See kalshi.com/regulatory for more information.
2. Polymarket US: best if you trade on an iPhone
Polymarket US (QCX LLC d/b/a Polymarket US) is a CFTC-designated exchange and clearing house. It is an iPhone app only; there is no desktop or Android version. You can deposit by debit card, bank transfer, Apple Pay, PayPal or Venmo, and its docs list no deposit fee. Not offered in Nevada. Polymarket US's minimum age is 18; we recommend 21+. Polymarket review.
Offer: Deposit $10 get a $25 Trading Bonus! iPhone app. Code RANKPREDICTS. The welcome offer covers 49 states plus D.C. (not Nevada). Claim the Polymarket US offer
18+ Only. Restrictions and eligibility requirements apply. Not available in all jurisdictions. Trading is risky. 100% loss can occur. See polymarket.com/tos for more information. The Polymarket US App serves as an independent software provider and affiliate of Polymarket US and Polymarket Clearing, the CFTC-regulated exchange and clearing organization.
3. ProphetX: best for sports traders
ProphetX (ProphetX LLC) became a CFTC-designated contract market on 11 June 2026. It focuses on sports trading, including parlays, on the web and in a mobile app. Its fee is simple to understand: 2% of your net winnings per market on straight trades. Minimum deposit $10. Not offered in Nevada. ProphetX's minimum age is 18; we recommend 21+. ProphetX review.
Offer: Trade $50, Earn $75! Code RANKPREDICTS. The welcome offer covers 49 states plus D.C. (not Nevada). Claim the ProphetX offer
Subject to regulatory approval. Limited time offer. T&Cs apply. New users only. 18+ only (21+ where required). Restrictions and eligibility requirements apply. ProphetX is not available in all jurisdictions. Event contract trading involves significant risk and is not appropriate for everyone. Please consider carefully whether it is appropriate for you in light of your personal financial circumstances. See prophetx.co for full terms.
4. OG (by Crypto.com)
OG is run by North American Derivatives Exchange, Inc. (NADEX), a CFTC-designated contract market, doing business as OG.com Prediction Markets. It works on the web and in a mobile app. OG says it operates in every state but that some contracts are not available everywhere. OG's minimum age is 18; we recommend 21+. OG review.
Offer: Trade $25 Get $25 in Rewards! (New users only) Code RANKPREDICTS, or use our link and leave the code box empty. The welcome offer covers 42 states plus D.C. Claim the OG offer
Paid partnership with OG. Terms and conditions apply. Trading derivatives involves risk and may not be appropriate for all. Availability subject to jurisdictional limitations. For more information, visit: OG.com.
5. Novig: sports, 21+ only
Novig (Ludlow Exchange, LLC) became a CFTC-designated contract market on 16 June 2026. Pre-game straight trades are free. It is not offered in Arizona, Michigan or Nevada. Novig's minimum age is 21. Novig review.
Offer: Deposit $10 Get $50 in Trade Credits! Code RANKPREDICTS. The welcome offer covers 47 states plus D.C. (not Arizona, Michigan or Nevada). Claim the Novig offer
Restrictions & requirements apply. Not available in all states. 21+. Event contract trading involves risk & is not appropriate for all. Consider if it's appropriate for you in light of financial circumstances. See novig.com/terms for information.
Other apps you may have heard of. Some brokerage apps also offer event contracts. Robinhood, for example, offers sports event contracts (it paused them in February 2025 at the CFTC's request and resumed in March 2025) and has faced state orders over them (it agreed in September 2026 to stop new sports contracts in Michigan). These are not our partners and we have not checked their fees and state lists to the same standard, so they are not in our starter list. See Kalshi vs Robinhood and all comparisons.
Your first trade, step by step (Kalshi example)
- Open Kalshi through our link
- Create an account with your personal details. You must be 18 or older (we recommend 21+).
- Verify your identity if Kalshi asks you to.
- Enter code RANKPREDICTS if you are asked for one.
- Deposit at least $10. Bank transfer (ACH) is free; debit card deposits, including Apple Pay and Google Pay, may carry a 2% processing fee.
- Pick a market you understand. Open its rules and read exactly how it settles (which source, which date, what counts).
- Choose YES or NO and the number of contracts. Check the fee in the order ticket before you confirm.
- Watch the position. You can sell before settlement or hold to the end.
Your goal on the first trade is to learn how the product works with a small amount of real money, not to make a profit.
Fees, deposits and withdrawals in plain English
There are two kinds of cost: the trading fee the exchange charges, and any payment fee on deposits or withdrawals.
| Platform | Trading fee | Deposits and withdrawals |
|---|---|---|
| Kalshi | Fee charged when your trade fills, based on price and number of contracts; shown in the order ticket before you confirm | $10 minimum deposit; ACH and wire free; debit card may carry 2%; withdrawals free, with a personal daily limit |
| Polymarket US | Since 1 Oct 2026: price-based taker fee (highest near 50¢, about $1.74 per 100 contracts); resting (maker) orders get a rebate | No deposit fee listed; withdrawals free, back to the method you deposited with |
| ProphetX | 2% of net winnings per market on straight trades | $10 minimum deposit; help centre lists no deposit or withdrawal fees apart from EDGE Boost being free |
| OG | Fee when you open or close a position; price-based on most markets; none at settlement | No OG fee on deposits; ACH withdrawals free, instant RTP withdrawals 1.5% |
| Novig | Pre-game straight trades free; live, futures and parlays pay a price-based taker fee | Bank transfer and crypto deposits free; card and Apple Pay deposits 3%; $10 minimum withdrawal |
Fees checked 3 October 2026 on each platform's help pages. On price-based fees, the cost is usually highest for contracts near 50 cents. Our fees guide compares them in detail.
Six beginner mistakes to avoid
- Trading on something you cannot explain. If you cannot say why the price is wrong, skip the trade.
- Ignoring the spread. The spread is the gap between the best price to buy and the best price to sell. If YES is offered at 53 cents and you could sell at only 47 cents, you are 6 cents behind the moment you buy. Use limit orders (you set the price) instead of market orders, and favour markets where the gap is small.
- Not reading the settlement rules. Every contract says exactly how it settles: for example, the official final score or a first estimate of an economic number. Most "wrong" settlements followed the rules exactly.
- Holding losers to zero. A contract is a live position. If the reason you bought has gone, selling early limits the loss.
- Betting too big on one contract. A few oversized losses wipe out many small wins. Keep each position to a small, fixed share of the money you have set aside.
- Forgetting your state and the fees. Check whether a market is open where you are (sports contracts are the ones affected by court orders), and check the fee before every order.
Your first 30 days
| Days | What to do |
|---|---|
| 1-3 | Sign up on one platform and deposit $10 to $25. Browse markets without trading. |
| 4-7 | Place two or three small trades. Read each market's rules first. |
| 8-14 | Watch how prices move on news. Practise selling a position before settlement. |
| 15-30 | Place five to ten more small trades and keep a simple log: price, reason, result, fee. |
Keep records of every trade and withdrawal for your taxes; our tax guide explains what is settled and what is not.
Trade responsibly
Only trade money you can afford to lose: every contract can go to zero. Set a deposit limit before you start. If trading stops being fun or you chase losses, stop and get help: call 1-800-GAMBLER. More in our responsible trading guide.
Sources
Checked 3 October 2026.
- CFTC: Kalshi designation, release 8302-20; Polymarket US (QCX LLC); ProphetX LLC; Ludlow Exchange (Novig)
- Operator help pages, read 3 October 2026 (named, not linked: we only link to platforms through our tracked partner links): Kalshi help centre "Signing up as an individual" (age), "Fees", "Transfers FAQ"; Polymarket US docs "Fees", "Deposit methods"; ProphetX help centre "Understanding Fees", "Available Payment Methods (Deposits)", terms and conditions (age); OG help centre "Introducing OG.com U.S.", "Fees & Limits", "Wallet"; Novig support "Eligibility & Legality", "Fees on Novig", "Standard and Discount Pricing", "What is Novig" (age)
- Courts: Third Circuit, KalshiEX v. Flaherty; Ninth Circuit, KalshiEX v. Assad; Sixth Circuit, KalshiEX v. Schuler / Orgel; Supreme Court dockets 26-299, 26-338, 26-344
- State orders: Michigan (Kalshi injunction); Nevada (Kalshi); Nevada (Polymarket US); Washington (Kalshi)
- Robinhood: CFTC request and pause, Feb 2025; Michigan, Sep 2026
Frequently asked questions
What is a prediction market in simple terms?
A prediction market is an exchange where you buy yes-or-no contracts on real events. Each contract costs between 1 cent and 99 cents and pays $1 if the event happens and nothing if it does not, so the price works as the market's estimate of the probability. You can sell before the event if the price moves.
Which prediction market is best for beginners?
For most beginners, Kalshi: it is a CFTC-designated exchange on the web, iOS and Android, it lists economics, weather, politics and culture markets as well as sports, and the minimum deposit is $10. Polymarket US suits iPhone users, ProphetX suits sports traders, and OG is a fourth regulated option.
How much money do I need to start?
Kalshi and ProphetX have a $10 minimum deposit, and Polymarket US's welcome offer starts at a $10 deposit. Start with $10 to $25 that you can afford to lose and keep each trade small while you learn.
Are prediction markets legal in my state?
The exchanges are regulated by the CFTC, but states dispute sports contracts. As of 3 October 2026, court orders make Kalshi block sports contracts in Michigan, Nevada and Washington; Polymarket US and ProphetX are not offered in Nevada; Novig is not offered in Arizona, Michigan or Nevada. In 25 states a dispute is pending. Check your state on our US legal tracker.
How old do you have to be?
Kalshi's minimum age is 18; we recommend 21+. Polymarket US, ProphetX and OG also set 18 as their minimum; we recommend 21+. Novig's minimum age is 21.