Calculator
This tool is useful when a trade feels close. If the price looks only slightly better than your fair estimate, even small friction can push the required win rate above what your thesis actually supports.
Trade assumptions
This is a hold-to-resolution view. If you expect to trade out early, run the fee and slippage tools as a second check.
Why break-even probability matters more than raw contract price
Many traders compare their estimated probability directly to the market price and stop there. That is a useful first filter, but it is incomplete because the tradable break-even line usually sits above the displayed contract price once execution costs are included.
If you ignore those costs, you can label a trade as positive edge when it is actually neutral or negative after real-world friction. The smaller the edge, the more important this adjustment becomes.
- Market price is only the starting probability reference.
- Break-even probability rises when fees and slippage rise.
- Flat costs matter most on smaller trades.
- A thin edge can disappear quickly after friction.
How to use the break-even tool properly
Start with the actual contract price you expect to pay and the size you are considering. Then add cost inputs that reflect the venue and workflow you really use, not the most flattering version of the trade.
Once the tool shows the break-even probability, compare it with your own estimate and look at the remaining probability buffer. That is the cleanest way to decide whether the edge is wide enough to deserve execution.
- 1Enter price, stake, and your estimated win probability.
- 2Add fees, slippage, and flat cash costs.
- 3Compare the break-even line with your estimated probability.
- 4Check the maximum price your estimate can still justify.
Worked break-even example
Imagine a contract trades at $0.43 and you want to deploy $250. If you estimate the true win probability at 56%, the raw setup may look comfortably positive. But once fee rate, slippage, and fixed costs are included, the break-even probability moves upward.
The tool shows both that required threshold and the remaining buffer between your view and the real break-even point. That lets you separate genuine edge from edge that only exists before cost accounting.
- The buffer is more decision-useful than price alone.
- Maximum price helps with limit-order discipline.
- A trade can look good at one price and fail at a slightly worse fill.
The mistakes that make breakeven math misleading
The most common mistake is using your estimate but forgetting that execution has a cost. The second is feeding the tool a stake number that does not match the actual order you plan to send, which makes flat costs look smaller or larger than they really are.
Another mistake is treating the break-even probability as enough proof to trade. A trade that barely clears the threshold may still be too thin once uncertainty in the probability estimate is considered.
- Comparing estimate to price but not to real break-even
- Ignoring fixed costs on small trades
- Using optimistic fee or slippage assumptions
- Treating a tiny buffer as if it were robust edge
If the probability buffer is small, assume your estimate is less precise than you want it to be. Thin buffers usually deserve smaller size or no trade at all.
Sources
These references support the assumptions and workflow guidance on this page. Always verify current platform rules before relying on a calculator preset.
Internal guide explaining how prediction market prices map to implied probability.
Internal guide on probability edge and how traders identify incorrect market pricing.
Internal guide covering the basic process around entering and evaluating a prediction market trade.