Research, Information and Trading Edge
28 words you meet in prediction markets, each one explained plainly.
Alternative Data
Alternative data is information used to analyze an event that comes from sources outside the most conventional datasets or reports. Depending on th...
Anchoring Bias
Anchoring bias occurs when a trader relies too heavily on an initial number, belief or probability when evaluating new information.
Breaking News
Breaking news is newly reported information that may materially affect the probability of an unresolved event.
Confirmation Bias
Confirmation bias is the tendency to favor information that supports an existing belief while giving less weight to evidence that challenges it.
Consensus Forecast
A consensus forecast is an estimate created by combining or summarizing forecasts from multiple analysts, economists, models or other forecasters.
Crowd Wisdom
Crowd wisdom describes the idea that combining information and judgements from many participants can sometimes produce estimates that are more accu...
Data Edge
A data edge is an advantage created by using relevant data more effectively than the broader market.
Forecast Model
A forecast model is a structured method for using data and assumptions to estimate the probability or future value of an outcome. Models may range...
Herding
Herding occurs when participants follow the actions or beliefs of others rather than independently evaluating the available evidence.
Information Advantage
An information advantage exists when a trader possesses or develops information relevant to an outcome that is not yet fully reflected in the marke...
Information Edge
An information edge exists when a trader has access to relevant information, research or analysis that allows them to estimate an outcome more accu...
Information Lag
Information lag is the period between relevant information becoming available and that information being fully reflected in market prices.
Information Quality
Information quality describes how reliable, relevant, timely and useful a piece of information is for evaluating an outcome.
Market Efficiency
Market efficiency describes the extent to which available information is reflected in market prices.
Market Inefficiency
Market inefficiency describes a situation where available information or reasonable probability estimates may not be fully reflected in market prices.
Market Reaction
Market reaction is the change in price or trading activity that follows new information or changing expectations.
Narrative
A narrative is a widely shared explanation or story used to make sense of events and expectations.
Noise
Noise is information or market activity that appears meaningful but provides little useful evidence about the true probability of an outcome.
Price Discovery
Price discovery is the process through which buying and selling help establish the market price of an asset or contract. In prediction markets, thi...
Priced In
Priced in means information or expectations are already substantially reflected in the current market price.
Primary Source
A primary source is original information produced directly by the organization, person, authority or dataset relevant to the event being researched...
Recency Bias
Recency bias is the tendency to give disproportionate importance to recent information or events.
Research Edge
A research edge is an advantage created by finding, verifying or analyzing relevant information more effectively than other market participants.
Rumour
A rumour is information circulating without sufficient confirmation from reliable sources.
Secondary Source
A secondary source interprets, reports or analyzes information originating elsewhere. Examples include news reports, research articles, analyst com...
Signal
A signal is information that genuinely improves understanding of an outcome or helps produce a better probability estimate.
Source Verification
Source verification is the process of checking whether information is authentic, current and accurately represented before using it in a probabilit...
Timing Edge
A timing edge exists when a trader identifies and correctly interprets relevant information before it is fully reflected in the market price.