Expiry-Based Instruments
Expiry-based instruments give traders exposure to an outcome over a fixed time window. Instead of remaining open indefinitely, the contract has a specified expiry, maturity, or resolution point.
At that point, positions may be settled, exercised, rolled, closed, or become worthless depending on the instrument rules. In prediction markets, an expiry-based instrument may represent a yes/no or multi-outcome contract that resolves after an event deadline.
The deadline might be an election date, an economic data release, a sports match, a court decision, or a protocol milestone. In derivatives markets, common examples include options, futures, forwards, and other contracts whose value changes as expiration approaches.
These instruments are sensitive to time because every remaining minute can affect price, liquidity, and risk. A market that looks calm several days before expiry may behave very differently in its final hours. Spreads can widen, order books can thin, and participants may rush to hedge, close, or roll positions.
For developers and analysts, the expiry timestamp is not just metadata; it is part of how the instrument should be priced, monitored, and displayed. Clean lifecycle data helps applications know when a market is active, close-only, expired, settled, or archived.
Why It Matters
- Defines the exact time window in which an outcome or payoff is tradable.
- Creates predictable settlement and resolution mechanics for traders, APIs, and risk systems.
- Helps platforms manage lifecycle events such as listing, active trading, close-only periods, expiry, settlement, and archival.
- Makes time-to-expiry an important input for pricing, market making, and portfolio risk.
- Requires clean market data and order-management integrations so applications can react before trading ends.
How do expiry-based instruments work in prediction markets?
In prediction markets, expiry-based instruments usually connect a market question to a deadline and a resolution source. A yes/no contract may trade until a stated cutoff time, then resolve when the event result is known.
Multi-outcome markets can work the same way, with each contract representing one possible result. Before expiry, prices often act like live probability signals because traders are buying and selling their views on the event. Near the deadline, new information can cause fast price moves if the market receives polling data, official announcements, macro releases, or venue updates. After the deadline, the platform typically restricts new trading and moves the market toward resolution. Applications need to track each state carefully so users do not mistake an expired market for an actively tradable one.
Why does time to expiry matter, and what happens when an expiry-based instrument settles?
Time to expiry matters because the remaining window changes how much uncertainty is left in the contract. A contract with months remaining may still react to many possible news events, while a contract with minutes remaining may depend on one final data point or announcement. Liquidity can also change as market makers reduce exposure or traders close positions before the deadline.
When the instrument settles, the platform applies the stated rules to determine the final result, payout, or delivery obligation. For a prediction-market contract, settlement may depend on an official source, oracle, or predefined resolution criteria. Once the result is confirmed, winning positions receive the defined payout and losing positions receive little or no value under the market rules. Good expiry and settlement data reduces confusion in trading interfaces, analytics dashboards, alerting systems, and risk-management workflows.
Real-World Example
A prediction market lists a contract asking whether a central bank will cut interest rates at its next meeting. The market trades until the scheduled decision time. Traders buy and sell based on economic data, public comments, and their expectations for the announcement. Once the decision is released and the resolution source confirms the result, the contract expires. Winning outcome tokens settle according to the market rules, while losing outcome tokens no longer carry value.
Expiry-Based Instruments and FinFeedAPI
The FinFeedAPI Prediction Markets API helps applications monitor expiry timestamps, resolution status, prices, order book depth, liquidity changes, and market lifecycle states for prediction-market instruments.
This is useful for trading interfaces that need to show whether a market is open, close-only, expired, or resolved. It also helps analytics dashboards measure how probabilities, volume, and spreads change as expiry approaches.
Alerting systems can use expiry and resolution fields to notify users before trading ends or after a market result is confirmed. Risk-management workflows can use the same data to reduce stale exposure, flag markets near settlement, and track positions through the full event lifecycle.