Prediction markets keep listing the same question four or five times with nothing changed but the deadline. Will the Fed cut by March. By June. By year-end. The same pattern shows up for court rulings, product launches, protocol upgrades, anything where the real uncertainty is when rather than whether. Most traders price each contract on its own, and for a long time so did I. The better habit is to read the whole ladder at once, because a set of dated contracts on one event is a cumulative probability distribution the market has already assembled for you, updated continuously, with money behind every point on the curve.
The logic is close to trivial. Every world where the event happens by March is also a world where it happens by June, so the June contract has to trade at or above March, September at or above June, and so on up the ladder. Prices that respect that ordering trace out a cumulative distribution function over time. Prices that violate it are telling you something is broken, and broken in a way you can occasionally get paid for, which I will get to.
What the ladder tells you that no single contract does
Take a hypothetical ladder: 20 cents for the March deadline, 55 for June, 75 for September, 85 for year-end. Read each in isolation and you have four separate probabilities. Read them together and you have the timing. The chance the event lands between March and June is 55 minus 20, roughly 35 percent, which makes that window the market's modal guess. June to September carries about 20 points, the final quarter about 10, and the remaining 15 percent is the chance it slips past year-end or never happens at all. Nobody quotes you that middle window directly. It only exists in the gap between two contracts, and it is frequently the most useful number on the board.
Two derived readings earn their keep. The first is the implied median, wherever the ladder crosses 50 cents, in this example somewhere between March and June. It is a much better one-line summary of the market's view than the price of whichever contract happens to be most liquid. The second is the conditional read: given the event has not happened by one deadline, what is the chance it happens by the next. Divide the window's probability by whatever mass is left. June to September here is 20 divided by 45, so roughly 44 percent. A ladder can look calm on the surface while the conditional numbers show the market quietly assuming that if the thing drags past summer it probably dies.
Building the curve in a spreadsheet
The whole exercise is one column of subtraction, which is most of the appeal. My version looks like this.
- One row per contract, sorted by deadline, with the deadline date in column A.
- Column B is the YES price. Use the midpoint of bid and ask rather than the last trade, because last trades on thin dated contracts can be hours or days stale and will hand you phantom shapes.
- Column C is the incremental probability, each row's B minus the B above it. Add a final row for the event landing after the last deadline or never, equal to one minus the final price.
- Column D is the conditional probability, C divided by one minus the previous row's B.
- Chart B as a line against the dates to get the implied cumulative curve, and C as bars to see where the market thinks the event actually lands.
What makes this worth refreshing is watching the shape move rather than the level. News can shift probability mass earlier without changing the total, so a headline yanks the March contract up ten cents while year-end barely budges. If you were watching a single contract you would read that as the event getting more likely. On the ladder you can see the market saying the event is about as likely as before but coming sooner. Those are very different trades, and the difference is invisible unless you compute the increments.
When the ladder cannot be right
Every so often the ordering breaks and a later deadline trades below an earlier one. Say June YES is at 48 cents and September YES is at 45. There is no coherent view of the world under which both prices are fair, since every path that resolves the June contract YES also resolves September YES. When the break exists at real, executable prices, there is a mechanical trade. Buy the September YES at 45 and buy the June NO at 52, for a total outlay of 97 cents per pair. If the event happens by June, September YES pays a dollar and June NO pays nothing, so you collect 1.00. If it happens between June and September, both legs pay and you collect 2.00. If it has not happened by September, June NO pays and September YES does not, 1.00 again. Worst case you get back more than you put in, before fees, and the middle scenario is a free lottery ticket on top.
In practice most inversions you spot are not tradable, and it is worth being honest about why. The gap usually lives between midpoints and disappears once you price both legs at the ask. Fees can swallow an edge of a cent or two entirely. Fill risk is real on thin books, where one leg executes, the market moves, and you are left holding a naked directional position you never wanted. And the quiet killer is resolution criteria. Two contracts that look like the same event at different dates sometimes resolve from different sources or under subtly different definitions, an official announcement for one deadline and a looser standard for another. At that point the monotonicity argument stops applying, because the contracts describe different events wearing the same name. My rule of thumb is that the inversion needs to be several cents wide at prices I can actually hit, net of fees, and I read both resolution clauses word for word before committing anything. It also helps to remember that the guaranteed leg pays at resolution, possibly months out, so annualize the return before deciding the capital lockup is worth it.
Even if you never trade an inversion, the curve is the payoff. We wired dated ladders into Blockcircle's prediction-market feed partly because watching one contract at a time hides all of this structure, but the manual version costs you five minutes. Pull the prices, subtract down the column, look at where the mass sits and where the ladder crosses 50 cents. You end up with a live, money-backed timeline for the event that most of the people trading those exact contracts have never bothered to compute.