Betting & Prediction Market Glossary

An odds format where negative numbers show how much to risk for $100 profit, and positive numbers show profit on a $100 bet.

An odds format showing total return per unit staked. Decimal 2.50 means $2.50 back per $1 bet.

An odds format expressed as a fraction (e.g., 5/2) showing profit relative to stake.

The probability of an outcome implied by the odds. Includes the bookmaker's margin (vig).

A bet on which team or player will win outright, with no point spread. Odds are expressed in American format.

A handicap applied to the favorite to level the playing field. The favorite must win by more than the spread to cover.

A bet on whether the combined score will be over or under a set number. Typically offered at -110 on both sides.

The bookmaker's built-in commission. The difference between true odds and what you're offered.

The total implied probability exceeding 100% across all outcomes in a market — the bookmaker's total margin.

The average profit or loss per bet if you made the same wager thousands of times. Positive EV means long-term profit.

A formula for optimal bet sizing that maximizes long-term bankroll growth based on your edge and the odds.

The actual estimated likelihood of an outcome, with the bookmaker's margin removed.

Getting better odds than the final line at market close — the strongest indicator of long-term betting skill.

Betting both sides of a market across different books to lock in a guaranteed profit regardless of the outcome.

A single bet combining multiple selections — all must win for the parlay to pay out.

The total amount of money set aside exclusively for betting or trading. Never money you can't afford to lose.

A professional or skilled bettor whose action moves lines. Sharps consistently beat closing lines.

The minimum win rate needed to break even at given odds, accounting for platform fees.

The process of removing the bookmaker's margin from odds to estimate the true probability of each outcome.

The percentage of total money wagered that the sportsbook keeps as profit. Related to but not identical to overround.

The difference between your estimated true probability and the implied probability of the odds. Positive edge means +EV.

Placing a bet on the opposite outcome to guarantee profit or reduce risk on an existing position.

The hypothetical odds with zero bookmaker margin. Used as a benchmark for finding value.

Total profit divided by total amount wagered, expressed as a percentage. The standard measure of betting profitability.

A contract that pays $1 if an event occurs and $0 if it doesn't. The price reflects the market's implied probability.

An exchange where participants trade contracts based on the outcome of future events, with prices reflecting collective probability estimates.

A market with more than two possible outcomes (e.g., 'Who will win the election?' with 5+ candidates).

Trading the same event across multiple platforms to find price discrepancies, arbitrage, or better odds.

The natural fluctuation in results around your expected value. High variance means bigger swings even with an edge.

The degree to which your prediction market positions move together. Highly correlated positions amplify risk.

How many times you cycle through your bankroll over a period. Higher turnover with positive edge means more total profit.

The US federal agency that regulates prediction markets. CFTC-regulated platforms offer legal event contracts in all 50 states.

A CFTC-regulated exchange authorized to list and trade event contracts. Kalshi, ForecastEx, and CME Group are DCMs.

A list of all pending buy and sell orders at different prices. Platforms with order books offer better price transparency.

The difference between the expected price and the actual execution price, usually caused by thin liquidity or large order sizes.

How easily you can buy or sell contracts without significantly moving the price. More liquidity means tighter spreads and less slippage.

The fee charged when you execute against existing orders in the book. Taker fees are higher than maker fees on platforms like Kalshi.

The fee charged when your limit order rests on the book and gets filled later. Typically lower than taker fees to incentivize liquidity.

The maximum number of contracts or dollar amount you can hold on a single market. Varies by platform.