Lesson · [ 20 ]

READING RESOLUTION CRITERIA

Beginner6 min

Plain English

The most expensive mistakes in prediction markets come from misreading the contract. 'Will Trump win the election?' sounds simple — but the contract specifies which election, certified vote, and resolution timing.

Going deeper

Every contract has a resolution document that defines what counts as a Yes outcome, what data source is used, and when the market settles. Differences matter: 'CPI year-over-year above 3.5%' could resolve on the BLS print, BLS revision, or median of multiple sources. Disputes occur on ambiguous wording — Polymarket has had multi-day controversies on edge cases. Best practice: read the full resolution criteria before every meaningful position; verify the data source is unambiguous; avoid contracts where you can imagine an interpretation problem.

Examples

Ambiguous data source

A 'will it rain in NYC' contract resolved differently than expected because the rule used Central Park measurement, not LaGuardia. Traders who assumed the wrong source took losses.

Election certification timing

An 'election winner' contract may resolve on AP call, electoral certification, or inauguration. The differences matter when results are contested.