Trading event markets

Event markets let you trade the probability of each outcome by buying and selling YES and NO tokens for that outcome.

Event markets are separate from event conditionals. Event markets express a view on which outcome happens. Event conditionals express a view on where an asset's price settles if an outcome happens.

What you buy when you trade

An event market has a fixed set of mutually exclusive outcomes, and exactly one outcome is realized at resolution.

For a given outcome:

• A YES token pays 1 USDC if that outcome is realized, and 0 USDC otherwise.

• A NO token pays 0 USDC if that outcome is realized, and 1 USDC otherwise.

“NO for an outcome” means “any outcome resolves true except this one”.

How to read the price

Butter quotes prices in $ per share, which is USDC per share.

Since a YES token pays 1 USDC if it wins, the USDC price per share is also the market-implied probability, up to fees and market microstructure.

Example: If the pool shows $0.25 per YES share, then the implied probability is 25%.

Arbitrage across venues

Event markets trade outcome probabilities.

For two-outcome events, the asset’s spot price together with the conditional branch prices implies an outcome probability.

If $\text{spotPrice}$ is the spot price, $\text{conditionalPriceYes}$ is the conditional price in the “Yes” branch, and $\text{conditionalPriceNo}$ is the conditional price in the “No” branch, then the spot-implied “Yes” probability is:

$\text{eventProbability} = \frac{\text{spotPrice} - \text{conditionalPriceNo}}{\text{conditionalPriceYes} - \text{conditionalPriceNo}}$

You can compare this spot-implied probability to the event market’s implied probability for the same outcome. When they disagree, you can trade the cheaper probability exposure and hedge using the richer one across the event market, the conditional branches, and spot, subject to fees, slippage, and liquidity.

You can also compare Butter’s event market probability to Polymarket when Polymarket lists a market for the same event.

Before comparing venues, confirm that:

• The event question matches.

• The resolution date is the same or similar.

• The resolution criteria matches.

Placing trades

Event markets support four trade intents:

• BUY_YES

• SELL_YES

• BUY_NO

• SELL_NO

Buying and selling YES trades a single YES/USDC market for the selected outcome.

Buying and selling NO is a single user action, but it is implemented under the hood by trading the complement outcomes' YES tokens and wrapping or unwrapping them. You do not manage the wrapping steps manually.

Butter also applies mandatory netting between YES and NO for the same outcome. If you buy YES while holding NO for that outcome, Butter sells NO first instead of increasing your gross exposure, and the same applies in the opposite direction.

What happens at resolution

At resolution, one outcome is realized:

• YES for the realized outcome pays 1 USDC per share, and all other YES tokens pay 0.

• NO for the realized outcome pays 0, and all other NO tokens pay 1 USDC per share.

How this relates to event conditionals

Event markets answer “which outcome happens”.

Event conditionals answer “where does an asset settle if this outcome happens”.

If you want to trade an asset’s price conditional on an outcome, start with:

• Getting started

• How to trade