What is the spread in a prediction market order book?

Best ask minus best bid: the round-trip cost of taking liquidity on both sides. Anything wider than 3¢ on a $1 contract is a tax that compounds across the round trip. The mid, the midpoint between best bid and best ask, is the fairest single-number price, but nobody actually trades at the mid.

When should you use a limit order instead of a market order?

Default to limit unless you have a reason. Market orders feel decisive but are the most expensive way to enter a thin book: you pay half the spread on small size plus depth-impact slippage on anything that walks the book. Most experienced traders post a limit one or two cents inside the best price on their side, then re-quote if the market moves away.

How much slippage does order size cause?

It compounds non-linearly. Against the module’s sample book with a 0.630 best ask, a 100-share buy fills at the headline price, 500 shares average 0.638, 1,000 average 0.645, and 2,000 average 0.654, a 2.4¢ hit. If the edge you think you have is 3–4¢, that slippage cuts it in half before the position even opens.

What does the YES + NO parity check tell you?

Whether the headline price is honest. If YES ask + NO ask sums below $1.00, buying both sides locks in profit, since the pair always settles to exactly $1.00. If YES bid + NO bid sums above $1.00, a pair holder can sell into both bids for guaranteed profit. A sum like 1.04 across the asks means both books are quoting wide, usually a volatility spike or pulled quotes: trade smaller or wait.

What should you check in the five seconds before a trade?

Five things: the spread (over 3¢ on a $1 contract is a compounding tax), depth at your size (does it fill in the top one or two levels or walk down), last fills (prints stretching back hours mean the headline is advisory), parity (YES ask + NO ask above 1.02 flags wide books), and exit shape (mirror the depth check on the side you’ll need to leave through).

Welcome to PM Academy

Module 05 · Advanced · ~12 min

The order book.

By the end of this module, you’ll read a Limitless order book in five seconds, spread, depth, where the next dollar of your size lands, and whether the parity check between YES and NO is intact.

Every price you see is the top of a stack of resting orders. To get there, you’ll learn how the bid stack, ask stack, and the parity between sides determine your real fill price, not the headline number.

Quick answer

How do you read a prediction market order book?

Check four numbers: best bid (the highest price someone will pay you), best ask (the lowest price someone will sell to you), the mid between them, and the spread, then read the depth to see where your size actually fills. The headline price in the UI is just the top of one stack of resting orders, not a fixed price. Depth decides your real fill: a 1¢ spread looks great until you’re selling 1,000 shares into a 220-share best bid and your average walks down the stack. Slippage is non-linear in size, each doubling of the order climbs into thinner depth. Before any trade, run the five-second pre-flight: spread (over 3¢ is a tax), depth at your size, recency of last fills, the YES + NO parity check, and the exit side’s liquidity, because liquidity to enter doesn’t guarantee liquidity to exit.

Section 01

Anatomy of the book.

A Limitless market lists two stacks of resting orders, one per side. Each row is a price someone is willing to trade at and the size waiting at that price. The headline number you see in the UI, “Yes 62¢”, is the top of one of those stacks, not a fixed price.

The four numbers that matter on every glance:

Best bid. Highest price someone will pay you to sell. If you sell instantly, this is your fill.
Best ask. Lowest price someone will sell to you. If you buy instantly, this is your fill.
Mid. The midpoint between best bid and best ask. The fairest single-number price, but nobody actually trades at the mid.
Spread. Best ask minus best bid. The round-trip cost of taking liquidity on both sides.

ask0.66820

ask0.65540

ask0.64310

ask0.63200 ← best ask

mid 0.625 · spread 0.01 (1.6%)

bid0.62220 ← best bid

bid0.61450

bid0.60700

bid0.581,200

YES book · depth in shares · spread & depth are the two numbers traders read first

Read the depth, not just the top. A 1¢ spread looks great until you realize the best bid is 220 shares and you’re trying to sell 1,000. Your average fill walks down the stack: 220 at 0.62, 450 at 0.61, the rest at 0.60. The headline price was 0.62; your real number is closer to 0.605.

Section 02

How orders interact.

Two order types do everything: market orders consume the book, limit orders join it. Two roles emerge: takers pay the spread for instant execution, makers earn the spread by waiting.

Market · taker

Speed, at a price.

You hit whatever’s sitting in the book on the opposite side. Fill is instant; price is whatever the stack delivers as your size eats through it.

Use it when: the trade is small relative to depth and timing matters more than price.
Cost: half the spread on small size, plus depth-impact slippage on size that walks the book.

Limit · maker

Price, no speed promise.

You post an order at a specific price. It rests until someone hits it, or until you cancel. You collect the spread instead of paying it, if you fill at all.

Use it when: you have a price in mind and can wait. Default for size.
Cost: non-fill risk, the market may walk away from your price and never come back.

Default rule

Limit unless you have a reason. Market orders feel decisive; they’re also the most expensive way to enter a thin book. The cost of a missed entry is bounded (you re-evaluate at a new price). The cost of crossing a wide spread or eating depth is realized the second you click. Most experienced traders default to a limit order one or two cents inside the best price on their side, then re-quote if the market moves away.

Section 03

The cost of size.

Slippage is the gap between the price you saw and the price you got. It comes from two places: paying the spread (cost of taking liquidity) and walking the book (eating multiple price levels because your size exceeded depth at the top).

Same book as Section 01. You’re a buyer. Your fill walks the ask side from the top down until your size is satisfied:

Buy size (shares)	Avg fill	Headline (best ask)	Slippage
100	0.630	0.630	,
500	0.638	0.630	+0.8¢
1,000	0.645	0.630	+1.5¢
2,000	0.654	0.630	+2.4¢

Slippage is non-linear in size. Doubling your buy from 500 to 1,000 nearly doubles slippage cost; another double to 2,000 nearly doubles it again because each step climbs into thinner depth. On a market where the edge you think you have is 3, 4¢, a 2.4¢ slippage hit cuts that edge in half before the position even opens. Sizing without checking depth is how good theses become bad fills.

Section 04

Both sides at once.

YES and NO each have their own book. The parity rule from Module 01 (YES + NO = $1.00) applies to fills, not just to mids. When the books drift, you can buy or sell the complement pair for a guaranteed payout.

Two checks every time you trade:

Ask + Ask check

YES ask + NO ask.

If you can buy YES at 0.63 and NO at 0.36 simultaneously, you’ve paid 0.99 for a pair that’s guaranteed to settle to $1.00, one cent of locked-in profit per pair, minus fees. This is the cheapest form of arbitrage in prediction markets.

Any sum below 1.00 across the two asks is an arb. Sum above 1.00 means you’re paying the round-trip spread tax twice, do not enter the same trade as both YES and NO without a reason.

Bid + Bid check

YES bid + NO bid.

If YES bid is 0.62 and NO bid is 0.39, the pair sums to 1.01. A holder of the YES/NO pair (which always pays out exactly $1.00) can sell into both bids for 1.01, one cent of locked-in profit per pair sold.

Sum above 1.00 across the two bids is an arb for anyone holding the pair. Sum below 1.00 is normal (the spread sits between bids and asks).

In practice

Live arbs on a single Limitless market are rare and tiny, market makers close them in seconds. The reason to learn the check is defensive: it tells you whether the headline price you see is honest. If YES ask + NO ask sums to 1.04, the market is quoting wide on both sides, usually because volatility just spiked or a maker pulled quotes. Trade with smaller size or wait. We come back to multi-platform versions of this in Module 09.

Common questions

PM order books: what people ask

Each answer also ships invisibly as schema.org FAQ data for search engines and AI assistants. Tap a question to expand.

What is the spread in a prediction market order book?

Best ask minus best bid: the round-trip cost of taking liquidity on both sides. Anything wider than 3¢ on a $1 contract is a tax that compounds across the round trip. The mid, the midpoint between best bid and best ask, is the fairest single-number price, but nobody actually trades at the mid.
When should you use a limit order instead of a market order?

Default to limit unless you have a reason. Market orders feel decisive but are the most expensive way to enter a thin book: you pay half the spread on small size plus depth-impact slippage on anything that walks the book. Most experienced traders post a limit one or two cents inside the best price on their side, then re-quote if the market moves away.
How much slippage does order size cause?

It compounds non-linearly. Against the module’s sample book with a 0.630 best ask, a 100-share buy fills at the headline price, 500 shares average 0.638, 1,000 average 0.645, and 2,000 average 0.654, a 2.4¢ hit. If the edge you think you have is 3–4¢, that slippage cuts it in half before the position even opens.
What does the YES + NO parity check tell you?

Whether the headline price is honest. If YES ask + NO ask sums below $1.00, buying both sides locks in profit, since the pair always settles to exactly $1.00. If YES bid + NO bid sums above $1.00, a pair holder can sell into both bids for guaranteed profit. A sum like 1.04 across the asks means both books are quoting wide, usually a volatility spike or pulled quotes: trade smaller or wait.
What should you check in the five seconds before a trade?

Five things: the spread (over 3¢ on a $1 contract is a compounding tax), depth at your size (does it fill in the top one or two levels or walk down), last fills (prints stretching back hours mean the headline is advisory), parity (YES ask + NO ask above 1.02 flags wide books), and exit shape (mirror the depth check on the side you’ll need to leave through).

Section 05

Five-second pre-flight.

Before every trade, run the same five checks. The whole sequence takes about as long as reading this sentence. The point isn’t to be clever, it’s to make sure the book agrees the trade is doable at the price you have in mind.

Spread. How many cents wide? Anything > 3¢ on a $1 contract is a tax that compounds across the round trip.
Depth at your size. Can you fill your full size in the top one or two levels, or will it walk down?
Last fills. If the recent prints stretch back hours, treat the headline as advisory, the market is thin enough that any large order will move it.
Parity. YES ask + NO ask. If it sums above 1.02, both books are wide, quote pulled or volatility spike.
Exit shape. Mirror the depth check on the side you’ll need to exit on. Liquidity to enter doesn’t guarantee liquidity to exit.

Module checklist

Five confirmations.

Tick each item once you’ve actually done it. The Continue button unlocks at 5/5.

I can name the four headline numbers on a book (best bid, best ask, mid, spread) without looking them up.

I can articulate why a market order is more expensive than a limit order on a wide book.

I can estimate slippage on a 1,000-share order from a sample book.

I can run the YES + NO parity check on bids and on asks and explain what each tells me.

I can run the five-second pre-flight on a real Limitless market without notes.

Module 05 complete

Your read on the book is honest.

You stop being surprised by your fill price the moment the book stops being a single number. Spread, depth, parity, three checks a market always answers honestly, even when the headline price misleads.

Concretely, three things the book gives you that a price chart never will:

The real cost of your size, not the marketing-friendly headline price.

A live audit of whether the market is actually liquid right now, not just whether it once was.

A parity check between YES and NO that flags wide quotes, pulled liquidity, and the rare arb before you pay the spread tax twice.

Next up: Module 06 covers what happens after the book closes, how the market actually resolves, where settlement risk hides in the rulebook, and which markets to walk away from before you ever look at the book.

Continue to Module 06

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