Event Contract Pricing and P&L

How are Event Contract prices determined by market participants?

Event Contract prices are determined by traders placing buy and sell orders on the exchange. Each trader specifies the price and number of contracts they are willing to trade. These orders form the market’s bids and asks. When a buy order and a sell order match, a trade takes place at the matched price. As traders place, change, or cancel orders, the available prices can change.

How do contract prices relate to implied probabilities, and what are the limits of that interpretation?

An Event Contract’s price can be read as an approximate market-implied probability. For example, a Yes contract priced at $0.60 suggests that traders collectively value the Yes outcome at roughly a 60% chance.

This is an interpretation of the market price, not a measured probability or a prediction guaranteed by the exchange or Webull. Prices reflect the orders traders are willing to place and may change quickly as new information emerges. The bid and ask can also differ, so the price you can actually buy or sell at may imply a different percentage. Fees affect your potential profit but do not change the event’s likelihood.

What do bid, ask, last traded price, and bid-ask spread mean for Event Contracts?

• Bid: The highest price a trader is currently offering to pay for a contract. A sell order may fill at this price if enough contracts are available at that bid.

• Ask: The lowest price a trader is currently willing to accept for a contract. A buy order may fill at this price if enough contracts are available at that ask.

• Last traded price: The price of the most recent completed trade. It may differ from the current bid or ask.

• Bid-ask spread: The difference between the bid and ask. For example, a 44¢ bid and a 46¢ ask have a 2¢ spread.

Quotes can change before an order executes, and larger orders may fill at more than one price.

Why might displayed Yes and No purchase prices not add up to exactly $1?

The prices shown to buy Yes and No are each the current ask price. Because traders can set different prices for their orders, the two purchase prices may add up to more than $1. For example, Yes may be offered at 46¢ and No at 56¢, for a combined purchase price of $1.02. The extra 2¢ reflects the bid-ask spread, not an additional possible outcome.

How do I calculate maximum potential profit and maximum loss?

For a standard Event Contract held through settlement, the selected outcome pays $1 per contract if correct and $0 if incorrect. Your purchase cost includes the contract price and applicable transaction fees.

• Maximum potential profit: Winning payout minus your total purchase cost.

• Maximum potential loss: Your total purchase cost if the contract pays $0.

For example, if one contract costs $0.45 plus a $0.02 transaction fee, your Estimated Total (Debit) is $0.47. If your outcome is correct, the $1 payout results in a $0.53 profit. If it is incorrect, you lose the $0.47 paid.

The order ticket shows the Estimated Total (Debit) and Payout if your selected outcome is correct, with estimated profit in parentheses. Review these amounts before submitting your order. Final costs may differ from the estimates shown before execution.