Market resolution is the final stage of a prediction market’s lifecycle. Before resolution, traders buy and sell outcome shares based on expectations, news, and shifting probabilities. But once the real-world event happens—such as an election result, data release, regulatory decision, or sports outcome—the prediction market must formally declare the correct result.
Resolving a market requires reliability. Platforms wait for verified, authoritative sources before locking in the final answer. This prevents disputes and ensures fairness. Once the official outcome is clear, the market is closed to trading, the truth value is assigned, and no further price movement is allowed.
After resolution, the market becomes a snapshot of what traders believed versus what actually happened. This final step provides a clean reference point that can be analyzed for forecasting accuracy, model improvement, and future decision-making. It’s where speculation ends and accountability begins.
Market resolution matters because it ensures fairness, transparency, and trust in prediction markets. Without accurate and timely resolution, trading would lose meaning—and the entire forecasting system would break down.
Platforms follow strict rules to decide when an event is “official.” They consult trusted sources like government statements, regulatory filings, court decisions, election boards, and widely recognized news outlets. Resolution teams cross-verify these sources to avoid mistakes, especially in close or controversial events. Only after confirming accuracy do they finalize the outcome. This verification protects traders from ambiguous or incorrect settlements.
Timing matters because traders’ profits depend on when the platform locks the result. A delay in resolution can freeze capital and leave uncertainty hanging, while resolving too early risks capturing incomplete or incorrect information. Proper timing ensures that the outcome reflects the real-world event as accurately as possible—just after the facts are confirmed but before confusion can cause mistrust. For active traders managing multiple positions, timely settlement keeps forecasting cycles running smoothly.
When a market resolves, trading halts immediately. All open orders are canceled, and outcome shares are valued based on the winning result—typically 1.00 for the correct outcome and 0.00 for the incorrect ones. Traders receive payouts automatically, liquidity pools are unwound, and profit-and-loss results are updated. The entire market becomes a closed record that developers and analysts can examine for prediction accuracy and behavioral patterns.
A prediction market asks: “Will Company X launch its new product by September 30?”
When September ends, the platform verifies the company’s announcement and determines the official outcome. If the product did launch, the market resolves in favor of “Yes,” and those shares pay out. Trading stops instantly, and traders receive their earnings based on the final decision.
FinFeedAPI’s Prediction Market API provides detailed data on resolved markets, including final outcomes, timestamps, payout rules, and price history leading up to resolution. Developers can use this information to analyze market accuracy, visualize pre-resolution volatility, or build tools that track how expectations changed before the final call. This data is essential for forecasting research and performance tracking.
