What is Event Trading? A 2026 Overview, Meaning and Brief Guide to Event Wagering

What is event trading? That’s a question we’ve been asked a lot over the past twelve months or so, as “prediction markets” like Kalshi, Robinhood, and Polymarket continue to make inroads in the USA.

Here, why not join our specialists for an introductory guide to event trading? We’ll define key terms like “prediction markets” and “event contracts”, giving you a useful starting point as a new online trader. There’s also a step-by-step guide on the basics of getting started at a new platform, plus a real-world example of an event trading market.

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• Markets include Fed rate decisions, inflation releases, jobs reports, and GDP data
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• Trade on outcomes tied to major economic indicators and announcements
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What is “event trading”?

Event trading is when you predict the outcome of an event. You can’t call this event betting as betting in event trading sites isn’t even allowed. This can be practically anything, be it sports or non-sports related, and a swathe of specialist trading sites have emerged online where you can participate in event trading in a safe, legal, and legitimate way.

These sites are known as “prediction markets”, and you might be familiar with some of the big names in the industry, including the likes of Kalshi, Robinhood, and Polymarket. Here, you can buy and sell “event contracts” based on your predicted outcome of an event.

Is event trading legal in the USA?

Yes, event trading is legal in the USA, provided you only participate in a reputable prediction market – preferably one that’s regulated and endorsed by the Commodity Futures Trading Commission (CFTC). So for those wondering if prediction markets are legal, there’s your answer.

What are the pros and cons of event trading in the USA?

Eager to figure out the good and the not-so-good of event trading? Our experts have compiled a list of key pros and cons to consider from the outset.

Pros and Cons

• Trade on practically anything
• CFTC-regulated sites are legal in all 50 states
• Surprisingly simple – when you know how

• Learning curve for beginners
• Regulatory scrutiny remains

How does event trading work?

Right now, you might be thinking that while event trading sounds interesting, you haven’t the faintest idea how it works or how to get started with it. So, we’ve pulled together a no-nonsense guide covering all the key details you need to know.

First things first: What exactly is an event contract?

An event contract is what you’ll buy and sell on a prediction market like Kalshi. It’s basically a trading commodity that lets you speculate on the outcome of an event, be it an upcoming election or an NFL game.

Typically, prediction markets use a binary trading system to let users predict whether an event will happen or not. As such, you can buy (and sell) “Yes” and “No” event contracts attached to specific markets.

Here’s a quick example…

The movie One Battle After Another will win Best Picture at the Academy Awards:

Here, you have two options: you can purchase a “Yes” event contract for 77¢ if you think the movie will take the Oscar, and a “No” event contract for 23¢ if you think the award will go elsewhere.

How is probability calculated in event trading?

Usually, event contracts are priced based on probability, though there may be a slight discrepancy between Kalshi vs Polymarket, for example. In the case of Kalshi, $1 per event contract means that the deemed probability of an event happening is 100%.

If an event happens that you’ve traded correctly on, you’ll receive a payout of $1 per correct event contract, regardless of the initial trading price. That means you can turn a profit if, say, you purchased 100 event contracts on OBAA to win the Oscar; you would have spent $77, but would receive $100 in return.

Event trading step by step

While event trading will undoubtedly take some getting used to, it’s actually very accessible once you know how everything works. And for those that may already be familiar with sports betting online, we would recommend our guide on prediction markets vs sportsbooks for some of the key differences between the two.

In the meantime, here’s a basic step-by-step guide on how event trading works in practice…

1. Find a suitable prediction market that works for you. We’ve recommended some platforms in the banners around this page, while our Kalshi vs Robinhood guide could also be worth reading if you’re splitting hairs between the two.

2. Register for a free account with your new prediction market. You’ll need to verify your ID, DOB, and residential address as part of the sign-up process.

3. Deposit funds into your new trading account.

4. Explore the variety of event trading contracts on offer. Reputable prediction markets let you make trades on a wide range of markets, be it sports, culture, politics, or the economy.

5. When you’ve found a market of interest, check the probability of each event contract by analysing the per-contract price. Then, select “Yes” or “No” and lock in your trade.

There’s more to learn about event trading

We hope that this brief, introductory guide to event trading proves useful in helping you get to grips with how event contracts and prediction markets work. There is, of course, much more to learn about the ins and outs of successful event trading, but the basic premise is simple and accessible enough for even the most casual of traders.

If you’re interested in joining any of the prediction markets referenced in this guide – including Kalshi, Robinhood, or Polymarket – you’ll find standalone brand reviews for each of these platforms around this page. Once you’re confident in your chosen site, you can sign up today by tapping its respective banner on this page.

What is event trading? FAQs