How Leverage Positions Work on PredMart
PredMart lets you open a bigger position on a prediction market outcome than your cash alone allows. You pick an outcome you believe in — Yes or No on a question, or a specific team, candidate, or option — put down some money (your margin), and PredMart lets you take a position up to 4x times bigger. If your outcome wins, you make more. If it loses, you can lose your margin.
Pick an Outcome
Every prediction market asks a question with multiple possible answers. You decide which outcome you think will happen, then back it with your money.
| What you do | You profit when | You lose when |
|---|---|---|
| Back Yes | The answer turns out to be Yes | The answer turns out to be No |
| Back No | The answer turns out to be No | The answer turns out to be Yes |
Thinking the outcome will happen = back Yes. Thinking the outcome will NOT happen = back No. When the market ends, winning positions pay out at $1 per share of notional. Losing positions pay $0.
Margin and Position Size
Two numbers define every position:
- Margin — the USDC you put down. This is the most you can lose.
- Notional — the total position size your margin controls.
Leverage is the multiplier:
Leverage = Notional / Margin
With 2x leverage, $100 of margin controls $200 of notional; you can go up to 4x. Gains and losses scale with notional, but your maximum loss is capped at your margin. Minimum margin per position: $1.
How Leverage Works
Leverage makes your position bigger. At 4x, price moves hit 4x times harder on your margin — both gains and losses.
You can choose any leverage up to 4x. Lower leverage means more cushion before you risk losing your position.
The Mark Price
The Mark is the fair price PredMart uses to open, close, and track your position. It comes from live market data.
Opening a Position
- You choose your outcome (Yes/No or a specific option), how much margin to put down, and your leverage.
- PredMart opens your position at the current fair price.
The entry fee is 0.1% of your notional. A small operation fee up to $0.01 covers transaction costs.
Calculating Your Gains and Losses
Your profit or loss depends on how the price moves after you open:
If you backed Yes: You profit when the price rises toward $1. You lose when it falls toward $0.
If you backed No: You profit when the price falls toward $0. You lose when it rises toward $1.
When you close:
- Profit: You get back your margin plus your gains, minus a profit fee (10% of your profit).
- Loss: You get back your margin minus your losses. No fee on losses.
The profit fee splits 7% to liquidity providers and 3% to the protocol.
Worked Example: Backing Yes
Setup: You think the answer will be Yes. The Yes price is $0.40. You put down $200 margin with 2x leverage, giving you $400 notional — 1,000 Yes shares at $0.40. Entry fee 0.1% of $400 comes out of your margin.
Price rises to $0.60:
Gain = 1,000 shares * ($0.60 - $0.40) = +$200
You get back = $200 + $200 - (10% of $200)
You nearly doubled your money (before fees).
Price falls to $0.35:
Loss = 1,000 shares * ($0.40 - $0.35) = $50
You get back = $200 - $50 = $150
You lost a quarter of your margin. No profit fee on losses.
Price keeps falling: your position is liquidated before your margin is gone — as soon as what is left of it drops to 20% of your position size, the position closes and you lose the margin left in it. The trading panel shows your exact liquidation price before you open (see Margin and Liquidation).
Worked Example: Backing No
Setup: You think the answer will be No. Yes trades at $0.70, so No costs $0.30. You put down $150 margin with 2x leverage, giving you $300 notional — 1,000 No shares at $0.30.
| What happens | Your gain or loss | What you get back |
|---|---|---|
| Yes falls to $0.50 (No rises to $0.50) | +$200 gain | $350 minus 10% of $200 |
| Yes rises to $0.75 (No falls to $0.25) | -$50 loss | $100 |
| Answer is Yes (No goes to $0) | Margin lost | Liquidated before resolution |
Position Lifecycle Summary
| Stage | What happens |
|---|---|
| Open | You pick an outcome and put down margin. Entry fee taken, position recorded. |
| Hold | Holding fee accrues over time. Your gain/loss changes as the price moves. |
| Close | You close when you want. Position settles at current price. Profit fee if you made money. |
| Liquidation | If losses eat through your margin, the system closes your position automatically. You lose the margin left in the trade. |
| Resolution | When the market ends, all positions settle at $1 (outcome happened) or $0 (it did not). |
Key Takeaways
- Back Yes if you think the outcome will happen. Back No if you think it will not.
- Leverage (up to 4x) multiplies both gains and losses.
- Margin is your money at risk. Notional is your total position size.
- The Mark is the fair price used for all calculations.
- Fees: Entry (0.1%), profit (10% on gains), operation (up to $0.01 per action).
Related Pages
- Fees — Full fee breakdown
- Margin and Liquidation — How liquidation works
- Oracle and Mark Price — How the fair price is determined
- Market Resolution — What happens when markets end