Volatility in Prediction Markets

Volatility in probability space

Volatility here is the standard deviation of hourly logit changes — how much a market's log-odds move per hour. Raw cent volatility misleads near the price boundaries, so all volatility statistics are computed in logit space.

Event phase changes everything

Volatility naturally explodes as resolution approaches: an in-game sports market should move more than one starting tomorrow, and both differ from an election market resolving next year. Comparing raw volatility across those phases flags nothing useful.

What Vol vs Peers means

Vol vs Peers divides a market's current hourly logit volatility by the median volatility of markets in a similar lifecycle/expiry bucket. A 3× reading means the market is three times as active as comparable contracts at the same point in their life — a discovery signal, not a judgment.

Logit Space and Prediction Markets · Methodology · Dashboard