I used ChatGPT to clarify how trading (not betting) works in a predictions market:

Great question! Let me break it down for you. In a predictions market, you're not just "betting"; you're essentially trading positions on what you believe the outcome of an event will be. It’s more like buying and selling stocks based on your predictions.

Let’s unpack your “No for everyone” idea:Let’s unpack your “No for everyone” idea:

While it sounds logical—because only one team wins, and the rest are “No”—it’s not that simple in a prediction market. Here’s why:

1. Market Prices Reflect Probabilities
   Each outcome (Yes or No) is priced based on what traders collectively think its likelihood is. For example:
   • If Team A has a 70% chance of winning, the "Yes" might cost you 70 sats, and the "No" might cost you 30 sats (because probabilities total 100%).
2. Profit Comes From Buying Low, Selling High
   You can profit if you correctly anticipate changes in the probability. If you think Team A’s chance is higher than the market believes (e.g., you think they’re 90%, but the market says 70%), you could buy "Yes" shares at 70 sats. If the odds shift in your favor (e.g., to 90%), you can sell those shares for a profit.
3. Diversified Strategies Matter
   Focusing solely on "No" for everyone isn’t necessarily profitable because:
   • If you buy "No" for every team, the collective cost will usually add up to 100%. If all other teams lose, your profit depends on whether the total payout (1 share = 1 sat) exceeds your investment.
   • You’d only profit if the market misprices "No" for one or more teams.
4. Liquidity and Timing
   • In many prediction markets, you can enter and exit positions before the event resolves. For example, if the odds for Team A winning drop from 70% to 50%, and you’ve bought "No," you can sell your position for a profit even before the game ends.

Why this matters:Why this matters:

Prediction markets reward people who can better estimate probabilities than the collective market. The key to making a profit isn’t about betting on winners or losers; it’s about identifying when the market misprices an outcome.

Quick Example:Quick Example:

Say the market thinks Team A has a 10% chance of winning (10 sats for "Yes"). But you know a key player is back in action, and you believe their real chances are 25%. You buy "Yes" at 10 sats. If others catch on, the price may rise to 25 sats, and you can sell your shares for a 150% profit.

It’s less about “betting” and more about spotting opportunities where the crowd gets it wrong. That’s the beauty of a prediction market!