Introduction
If you’ve ever wondered how prediction markets actually work, this is the guide for you. Yes/no contracts are the heart of Polymarket.co.za – and they’re far simpler than traditional betting.
What Exactly Is a Yes/No Contract?
A Yes/No contract is the simplest kind of prediction market bet. Instead of betting against a bookmaker’s odds, you’re simply predicting whether an event will happen (Yes) or not happen (No).
Each contract settles at either R1 (Yes) or R0 (No) once the event outcome is known.
Think of it like buying a tiny share in an outcome.
Example:
| Question | Price of “Yes” | What it means |
|---|---|---|
| “Will Bitcoin close above $100k this month?” | R0.60 | The market thinks there’s about a 60% chance |
If you buy a Yes contract for R0.60:
If the event happens → it settles at R1 → you make R0.40 profit
If the event doesn’t happen → it settles at R0 → you lose R0.60
If you instead buy No at R0.40, you’re betting the opposite.
The cool part is that prices move constantly, because other traders are buying and selling based on what they think will happen.
Prediction Markets vs Traditional Bookmakers
| Feature | Prediction Market (Yes/No Contracts) | Traditional Bookmaker |
|---|---|---|
| How odds are set | By the market (traders) | By the bookmaker |
| What you buy | A contract on an outcome | A bet at fixed odds |
| Can you exit early | Yes — sell your contract anytime | Usually cash-out only |
| Transparency | Price reflects real-time probability | Odds include bookmaker margin |
| Market movement | Prices move with trader sentiment | Odds move when the bookmaker adjusts |
| Potential strategy | Trade based on probability mispricing | Mostly betting against odds |
Simple Way to Think About It
A bookmaker bet is like placing a wager and waiting for the result.
A prediction market contract is more like trading the probability of an event — you can buy, sell, and react as the market changes.
That’s why prediction markets feel closer to trading a stock price, while bookmakers feel more like placing a traditional bet.
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Yes/No contracts have a binary outcome, which simply means there are only two possible settlement values:
Correct prediction → R1 per share
Wrong prediction → R0 per share
The price you pay for a contract reflects the current market probability. If your prediction turns out to be correct, the contract settles at R1, and your profit is the difference between what you paid and R1.
Real Example: Chiefs vs Pirates
Let’s say a prediction market asks:
“Will Kaizer Chiefs beat Orlando Pirates?”
At the moment you look at the market, the prices are:
| Contract | Price | Market Probability |
|---|---|---|
| Yes – Chiefs win | R0.55 | 55% chance |
| No – Chiefs win | R0.45 | 45% chance |
Scenario 1: You Buy “Yes”
You buy 10 Yes shares at R0.55 each.
| Item | Amount |
|---|---|
| Cost | R5.50 |
| If Chiefs win | Pays R10 |
| Profit | R4.50 |
Scenario 2: You Buy “No”
You buy 10 No shares at R0.45 each.
| Item | Amount |
|---|---|
| Cost | R4.50 |
| If Chiefs do NOT win | Pays R10 |
| Profit | R5.50 |
If your prediction is wrong, the contract settles at R0, meaning you lose the amount you paid for those shares.
Key Thing to Remember
With Yes/No contracts, the price equals probability.
R0.30 price ≈ 30% chance
R0.70 price ≈ 70% chance
That’s why prediction markets feel more like trading probabilities than placing traditional bets.
Live Example – Load Shedding Stage 5
Let’s look at a simple prediction market question:
“Will South Africa reach Load Shedding Stage 5 this week?”
The market currently shows the following prices:
| Contract | Price | Implied Probability |
|---|---|---|
| Yes – Stage 5 happens | R0.18 | 18% chance |
| No – Stage 5 does not happen | R0.82 | 82% chance |
The price represents the market’s estimate of the probability.
Example: Buying 100 “Yes” Shares
Suppose you think the market is underestimating the risk of Stage 5 and decide to buy 100 Yes shares at R0.18 each.
| Item | Amount |
|---|---|
| Price per share | R0.18 |
| Shares bought | 100 |
| Total cost | R18.00 |
Scenario 1: Stage 5 Happens
If Eskom announces Stage 5 load shedding, the market resolves to Yes, and each contract settles at R1.
| Item | Amount |
|---|---|
| Payout | R100 |
| Cost | R18 |
| Profit | R82 |
Scenario 2: Stage 5 Does NOT Happen
If Stage 5 never occurs during the specified period, the market settles to No, and the Yes contracts become worthless.
| Item | Amount |
|---|---|
| Payout | R0 |
| Cost | R18 |
| Loss | R18 |
Key Insight
The lower the price of a contract, the higher the potential return if you’re right — but it also means the market thinks the event is less likely to happen.
That’s why traders often look for situations where they believe the market probability is wrong.
First-Trade Checklist for Beginners
If you’re new to prediction markets, following a simple checklist can help you place your first trade on Polymarket South Africa with confidence. These steps ensure your account is set up correctly and that you understand how Yes/No contracts work before risking real money.
Step-by-Step Checklist Before Your First Trade
Create and verify your account
Sign up on Polymarket and complete any required verification steps so you can deposit, trade, and withdraw funds without issues.Deposit South African Rand (ZAR)
Add funds to your account using Ozow or EFT, which are the fastest payment methods for South African users.
Internal guide:
How to Deposit ZAR on Polymarket.co.za in Under 5 Minutes (Ozow & EFT Guide)Browse active prediction markets
Look for markets you understand well — for example South African politics, sports, or load shedding forecasts.Check the current probability price
The contract price reflects the market’s estimated probability of the outcome.R0.20 ≈ 20% chance
R0.70 ≈ 70% chance
Choose “Yes” or “No”
Buy Yes if you believe the event will happen.
Buy No if you believe the event won’t happen.
Start with a small trade
Beginners should start with a small position so they can learn how prediction market prices move and settle.Track the market after entering
Prices change as new information appears. You can often sell your position before the event resolves if the probability moves in your favour.
Quick Beginner Tip
Many first-time traders start with sports or current-events markets, since the outcomes are easy to follow and the probabilities move quickly as news breaks.
Once you understand the basics, you can move on to strategies like buying undervalued probabilities or trading price movements before settlement.