Hedging
Taking offsetting positions to reduce risk. Buy NO against YES, or trade correlated markets in opposite directions.
In Depth
Hedging is a fundamental concept in prediction market trading. In platforms like Polymarket with thousands of active markets, understanding hedging is essential for consistent profitability. TradeSphere data across 5,400+ markets shows that traders who master these concepts significantly outperform those trading on instinct.
In practice, hedging connects to Diversification, Correlation, Risk-Reward Ratio. PolyPulse tracks these metrics and publishes weekly analysis. For hands-on application, PolyFire provides real-time market data and copy trading via Telegram.
Related Terms
3Diversification
riskSpreading capital across uncorrelated markets. Prevents single bad outcomes from devastating total returns.
Correlation
riskDegree to which markets move together. High correlation reduces diversification benefit. Essential for portfolio risk.
Risk-Reward Ratio
riskPotential loss vs potential gain per trade. A $0.30 YES share risks 0.30 to gain 0.70 — roughly 1:2.3 ratio.
See It in Action
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