> For the complete documentation index, see [llms.txt](https://docs.butter.markets/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.butter.markets/welcome/how-it-works.md).

# How it works

{% hint style="info" %}
Conditionals split one collateral deposit across branches, let you trade within a branch, and then settle only the realized branch to the oracle-reported settlement price.
{% endhint %}

1. Select an upcoming event or decision.
2. Choose a market, such as ETH-USD.
3. Deposit collateral. For each 1 USDC of collateral in a conditional, you can trade 1 conditional USDC in each branch.
4. Take long or short positions in one or more branches, such as long if the Fed cuts, short if the Fed hikes, and neutral if the Fed holds.
5. After the event resolves, positions in unrealized branches are set to zero, and only positions in the realized branch can be redeemed according to the payout rule.


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