What is a leveraged prediction market?
A leveraged prediction market lets you take a position larger than your own stake on the outcome of a real event. Worm supplies the extra capital. Gains and losses both scale up, and a position can be liquidated if the price moves against you.
Prediction markets in one minute
A prediction market asks a question about the future, such as who will win a match or whether a price will be reached by a date. Each market has Yes and No shares priced between 0 and 1 USDC.
The Yes price is the market’s estimated probability. A price of 0.70 means traders see about a 70% chance. When the market resolves, the correct side pays $1 per share and the other side pays $0.
Prices move as traders react to news. You can sell your shares before the event ends, or hold them to resolution.
The upside problem
The more likely an outcome, the less a correct trade on it returns. If a market is at 80% Yes, a correct Yes trade returns at most 25%, however confident you are. Leverage lets your return match your conviction.
How leverage works on Worm
You provide the capital, and Worm supplies the rest. Together they open a larger position on the side you choose. You set your leverage with a slider in the trade panel.
Before you confirm, the panel shows your average fill price, your shares, your liquidation price, the fees and your total return if you win.
Where the prices come from
Leveraged markets are curated by Worm. Worm combines its own order book with the order books of major prediction market platforms and routes your trade to the best available price.
The rules and resolution follow the source markets. Worm waits for the underlying markets to resolve before it settles your position.
- You can place market or limit orders on leveraged markets.
Fees
An opening fee comes out of the amount you put in. When you win or close early, a closing fee comes out of your payout. If your position is liquidated or loses at resolution, no fee is charged. Worm charges no interest on the capital it supplies.
Example trade
Illustrative numbers only. You put in $100 and Worm adds $100. At 2× leverage on Yes at 80¢, $200 buys 250 shares.
If Yes wins, the shares pay $250 and Worm’s $100 is repaid, leaving you $150 before fees, compared with $125 without leverage.
Opening and closing fees apply, and the trade panel shows the exact amounts before you confirm.
The main risk: liquidation
Every leveraged position has a liquidation price. Your position is liquidated before your losses reach your full stake. You get nothing back, no fee is charged, and you can never lose more than you put in. Prediction market prices can move fast around big events, so this can happen sooner than you expect.
Tools to manage a position
- Take profit closes your position when the price reaches a level you set.
- Stop loss closes your position to limit losses if the price falls to a level you set.
- Both can be set in cents, such as 70¢, or as a percentage move from your entry.
Frequently asked questions
No. Only curated leveraged markets support it. You can find them on the Leverage page. Markets created by users do not support leverage.
No. A leveraged position is closed before your losses reach your full stake, so you can never lose more than you put in. You get nothing back if it is liquidated.
Yes. You can close it at the current market price while the market is open, or set take profit and stop loss levels to close it automatically.
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