You’re comparing two prediction markets. Both show a 58% probability for the same event. One has $1,320,000 in notional value. The other has $42,000. Which should you trust more? Which is safer to trade? Notional value — the total dollar amount of contracts traded in a market — is one of the most useful signals available on any prediction platform. Here’s how to read it and use it to make better trading decisions.
Defining Notional Value
Notional value represents the total monetary size of all contracts traded in a specific prediction market outcome. It is distinct from trading volume in that it reflects the cumulative dollar exposure, not the number of transactions.
On Prediction Terminal, you’ll see notional values displayed alongside odds for each market row. A market showing “$1,320,000” in notional value means approximately $1.32 million worth of contracts have been traded on that outcome across the platform. This is real money from real traders with real conviction.
Notional value is to prediction markets what trading volume is to financial markets — a fundamental measure of market activity and depth.
Notional Value as a Confidence Signal
High notional value markets carry more information than low notional value markets. When $1 million has been staked on a particular outcome, that price has been tested and accepted by a large number of independent market participants. It has survived scrutiny.
A 72% probability in a $1.3M notional market is very different from a 72% probability in an $8,000 notional market. The first is a robust price signal. The second could be moved significantly by a single trader — and may not reflect genuine market consensus at all.
When comparing similar markets across platforms on Prediction Terminal, always weight the higher-notional market more heavily in your analysis.
Notional Value and Liquidity Risk
Notional value directly determines your ability to trade efficiently. In high-notional markets, you can buy and sell positions without significantly moving the price. Your trade is a small fraction of total market activity.
In low-notional markets, even a modest-sized position can shift the odds meaningfully — both when you enter and when you exit. This is known as price impact, and it can erode your edge before the event even resolves.
As a rule, avoid trading large positions in markets with notional values below $100,000. The price impact risk is typically higher than the edge you’re trying to capture.
Comparing Notional Values Across Platforms
One of Prediction Terminal’s most useful features is showing notional values from multiple platforms for the same event simultaneously. This reveals interesting patterns.
Sometimes one platform has dramatically more capital behind a market than another. This often indicates that the platform with lower notional is being driven by a smaller group of traders — which can mean the price is less reliable or more susceptible to manipulation.
Occasionally you’ll see markets where Polymarket has $900,000 in notional but Kalshi shows only $85,000 for the identical event at slightly different odds. This gap is analytically useful — it may indicate where sophisticated capital is congregating and which platform’s price deserves more weight.
Making Notional Value Work for You
Build a simple checklist before every trade: check the odds, then check the notional value, then compare across platforms. High notional plus a tight bid-ask spread means a market worth trading. Low notional plus a wide spread means proceed with caution or avoid entirely.
For markets where you’re considering a larger position, notional value is especially critical. A $5,000 trade in a $50,000 notional market is a 10% position — large enough to move the price. The same trade in a $1M notional market is barely a ripple.
Use Prediction Terminal to track notional values across platforms in real time. It’s one of the fastest ways to identify the most trustworthy and tradeable markets available.
Frequently Asked Questions
What is notional value in prediction markets?
Notional value is the total dollar amount of contracts traded on a specific market outcome. It reflects cumulative financial exposure rather than the number of trades.
What notional value is considered safe to trade?
Markets above $500,000 in notional value are generally considered liquid and safer for larger positions. Markets below $100,000 carry meaningfully higher price impact risk.
Why do notional values differ between Polymarket and Kalshi for the same event?
Differences usually reflect each platform’s user base and where informed capital is concentrating. A large notional gap can signal which platform’s price deserves more analytical weight.