A price
is a claim.
A prediction-market contract pays $1 if the event happens and $0 if it does not. The price is therefore a claim about how likely the event is.
Break-even is simple: over many trades, the event must happen at least as often as the price implies just to cover your cost, and slightly more often once fees are included.
The favorite-longshot
tilt.
If prices were perfectly accurate, a 10¢ contract would hit 10% of the time. Studies of betting markets have often found a tilt: longshots hit less often than their prices imply, and favorites hit slightly more often. Findings for prediction markets are mixed and vary by market and period.
At 1.00, prices are perfectly calibrated. Higher values mean cheap contracts hit less often than their prices imply. This is a simple model, so treat its shape as illustrative.
A steady
habit.
Now suppose you buy the same contract again and again. Each thin gray line below is one possible sequence of results under the settings above; the dashed line is the average result.
The stats come from 300 simulated runs. Your own results would follow just one path, and short runs are dominated by luck, which is why a small average loss per trade is easy to miss.
Fees hit
cheap contracts hardest.
A fixed fee per contract is a bigger share of a cheap contract's price. The table shows the expected result per $100 staked, using your tilt and fee settings.
Share
your settings.
The link includes your slider settings, so anyone who opens it sees your exact scenario.