Why don't YES and NO prices always add up to 100%?

Short answer

On prediction markets, YES and NO prices typically sum to slightly less than 100% because of the bid-ask spread and platform fees embedded in quoted prices. The gap represents the cost of trading, not a mispricing or error.

What to know

Prediction markets display prices as implied probabilities. A YES share priced at 55 cents means the market collectively estimates a roughly 55% chance the event resolves YES. Ideally, if YES is 55% likely, NO should be 45% likely, and 55 + 45 = 100. In practice, the displayed prices rarely add up to exactly one dollar.

The main reason is the bid-ask spread. Market makers quote two prices for each outcome: a lower price they will buy at and a higher price they will sell at. When you see a single displayed price, it is often the mid-market estimate or the last traded price, not always the exact price you would pay. If you tried to simultaneously buy YES and NO at the prices shown, the total cost would exceed one dollar, ensuring the market maker earns a small margin.

Platform fees add another layer. Some prediction markets charge a percentage on winnings or embed a fee into every transaction. This fee comes out of the total pool, so the prices quoted to traders already reflect the cost of that extraction. The result is that YES + NO as displayed can sum to 98 cents, 96 cents, or similar values below one dollar.

The gap also fluctuates with liquidity. In thin markets with few active traders, spreads widen because market makers take on more risk and demand more compensation. In deep, actively traded markets, the spread compresses and the sum of YES and NO prices gets much closer to 100%.

Key points

• YES and NO prices summing to less than 100% is normal and expected, not a sign of an error or opportunity.
• The difference between the sum and 100% is sometimes called the "overround," "vig," or "juice" and represents the market's built-in cost of trading.
• Bid-ask spreads cause the price you pay to buy a share to be slightly higher than the price you would receive to sell it.
• Platform fees further reduce the effective payout, lowering implied prices below their theoretical values.
• Wider gaps typically signal lower liquidity, where fewer participants are actively quoting prices.
• A sum slightly above 100% is rare but can appear momentarily during fast-moving events before arbitrageurs correct it.

How it compares

• Traditional sportsbooks: bookmakers explicitly build in a margin so that backing all outcomes costs more than one dollar total, typically 5-10% or more above fair value.
• Polls: do not have prices at all, so there is no spread; percentages in polls are raw survey estimates, not market-derived probabilities with embedded costs.
• Stock markets: also have bid-ask spreads that widen in illiquid securities; the concept is identical, just applied to equity rather than binary outcomes.
• Decentralized prediction markets: may have lower fees than centralized alternatives, but spreads still exist because liquidity providers need compensation for holding inventory.

FAQ

Does the gap mean I can profit by buying both YES and NO?

Only if the prices sum to more than one dollar, which would mean you collect more than you spend regardless of the outcome. Prices summing to less than 100% mean the opposite: buying both sides costs less than one dollar in total but also pays out exactly one dollar, so you would always profit. In practice, markets correct this almost instantly, so sustained arbitrage opportunities are extremely rare.

Why does the gap change over time?

Liquidity and trading activity fluctuate. When many participants are active and placing orders close to the true probability, spreads narrow. When interest fades or an event is far from resolution, fewer market makers compete, spreads widen, and the sum of YES and NO drifts further from 100%.

Is the price shown the price I will actually pay?

Not always. Displayed prices often reflect the last traded price or the best available quote, while your actual execution price depends on where your order sits relative to the current order book. In markets with thin liquidity, there can be a meaningful difference.

Does a smaller gap mean the market is more accurate?

A smaller gap generally indicates more liquidity and competition among traders, which tends to produce prices that reflect available information more efficiently. However, a tight spread does not guarantee the market's probability estimate is correct, only that it is being actively traded.

Can fees vary between markets on the same platform?

Yes, some platforms charge different fee structures for different types of markets or apply fees based on volume tiers. It is worth reviewing a platform's fee schedule rather than assuming the gap you observe in one market applies everywhere.

What happens to the gap right before a market resolves?

As resolution approaches, uncertainty falls and trading converges on the likely outcome. Spreads often narrow because the event's result is more predictable and inventory risk for market makers decreases. The sum of YES and NO prices tends to get closer to 100% in the final period before resolution.