The language of the odds
Know what
the words mean.
A practical glossary of prediction market, API, and AI forecasting terms, with a reading path for each concept.
Agent
Software that can select a sequence of actions or tool calls toward a defined goal. In a research workflow, its permissions, evidence, and intermediate decisions should remain inspectable.
Read the related guideAsk
A price at which a seller is willing to sell a stated amount. The best ask is the lowest currently available ask in the relevant order book.
Read the related guideBid
A price at which a buyer is willing to buy a stated amount. The best bid is the highest currently available bid in the relevant order book.
Read the related guideBrier score
A scoring rule for probabilistic forecasts. For a binary event, square the difference between the predicted probability and the outcome, represented as 1 or 0. Average across the evaluation set; lower is better under that comparison.
Read the related guideCalibration
The relationship between stated probabilities and observed frequencies over a suitable set of questions. For example, forecasts assigned around 70% should occur around 70% of the time in a well-calibrated collection. That says nothing certain about one event.
Read the related guideContract
The defined instrument associated with an event or outcome. Its rules determine what is being evaluated and how the result is settled.
Read the related guideEvent
The broader occurrence or question around which one or more markets may be organized. Provider data models use this term in specific ways, so preserve the original definitions.
Read the related guideImplied probability
A probability interpretation inferred from a price or model under stated assumptions. A market-implied percentage is a signal shaped by market conditions, not an objective guarantee.
Read the related guideLiquidity
The practical availability of orders at prices and sizes relevant to a transaction. It affects how easily a position can be entered or exited without substantially changing the available price.
Read the related guideLLM
A large language model: a system that generates or analyzes text. Its fluent output needs evidence checks and a separate evaluation before it is treated as forecasting skill.
Read the related guideMarket depth
The quantity offered across price levels in an order book. Looking beyond the best price helps explain why execution conditions can change with order size.
Read the related guideOrder book
A record of available orders for a market. Its representation may differ by provider; understand which sides, units, and timestamps a response contains.
Read the related guidePaper trading
A simulation that records hypothetical decisions without placing real orders. Its fills, costs, delays, and constraints depend on the model and may differ from real conditions.
Read the related guideResolution
The process used to determine an outcome according to a market’s stated rules and source. The result should be interpreted through those rules rather than the headline alone.
Read the related guideSlippage
The difference between an expected execution price and the actual average execution price, under the definition used in a particular analysis. Size, timing, and available depth can affect it.
Read the related guideSpread
The difference between the best ask and best bid for the same outcome at a stated time. It is one element of the cost and context of acting on a price.
Read the related guide