Pre-trade diligence · Market Trust
Market Fitness: is this prediction market fit to trade, cite, or hedge?
Frozen 2026-09-05
The pre-registered forward test of Market Trust (AsPredicted #295174) returned the registered wording "Market Trust tiers do not separate on resolution cleanliness." A null is a valid pre-registered outcome, not a failure. Market Trust is frozen; this page is kept as dated history and does not describe a current product. The calibration verdict artifact is docs/ops/evidence/market-trust-v1-calibration-verdict/2026-07-30-terminal-analysis-point.json, indexed alongside the filing on the preregistration index.
The registered label must not be read alone. The higher-trust arm held four markets, so no attainable outcome for that arm could clear the filed threshold, and the contrast is therefore not established. That is not the same as the arms being alike: no equivalence margin was filed, so the frozen result settles the question in neither direction.
Before you size a position, cite a probability, or use a prediction market to offset an exposure, three questions decide if the market is usable: will it settle cleanly, can you fill at size, and is the price reliable. Convexly is the independent layer that reads those, market by market.
Three questions before you use a market
A prediction-market price is only usable once you trust how the market resolves, can transact the size you need, and believe the quote is a fair reference. Convexly reads each of these per market, independently, and never recommends an action. It scores the instrument, not your position.
Will it settle cleanly?
Resolution-reliability and the participant-integrity screen read the settlement source, the rule text, and whether the price was shaped by a concentrated or unidentified flow. A market that voids, disputes, or resolves on a technicality pays zero at the moment you rely on it. Settlement risk is the first thing a user of the market must price.
Can you fill at size?
The executability read estimates visible depth and modeled price impact at a given order size, plus the spread cost. A market that moves 20 to 50 percent against a meaningful order is not usable at that size, however attractive the headline price. The honest output on most active markets is that they are not fillable at institutional size, and that is the point.
Is the price reliable, and where is it better?
The structural-coherence flag marks where a quoted probability looks inconsistent with related markets. Where the same event trades on two venues at different prices, at least one is a worse entry, and a user choosing where to act learns which.
Why an independent layer
A venue cannot credibly audit its own settlement, and the largest prediction-market venues now have exchange and investor ties that make a self-issued quality read a conflict. The reads above are most valuable precisely when they are negative, and the most common honest output is that a market is not fillable at size or not yet clean enough to cite. An execution-free, fee-free, independent auditor is the only party that can publish that.
Mapped to the diligence factors regulators ask about
The June 2026 CFTC notice of proposed rulemaking on event contracts asks venues and counsel to address settlement integrity, manipulation, asymmetric information, and whether a price is a sound reference. Convexly's existing surfaces map onto those questions directly.
Settlement integrity
Market Trust resolution-reliability read + the source and rule-text check.
Susceptibility to manipulation
Participant-integrity / concentration screen on the flow that shaped the price.
Insider or asymmetric information
Edge Score participant-quality context on who is in the market.
Price-basing utility
Structural-coherence flag + cross-venue disparity read on whether the price is a usable reference.
What this is, and is not
- Descriptive diagnostics, not advice. Convexly does not tell you whether or how much to trade, hedge, or cite.
- The academic record (see the published-literature comparison) supports prediction markets as forecasts, not as hedges. A probability and a hedge that tracks your exposure are different things; basis risk is real.
- The Market Trust verdict is a candidate diagnostic with an honest interval. It is not presented as a settled settlement-risk rating until its pre-registered forward calibration (receipt on the preregistration index) resolves.
- Some inputs are not yet measured and are labeled as such on every card: durability of depth across time, and resolved-outcome dispute history.
How to read it
While the packets were served, the methodology and the qualitative reads (resolution reliability, manipulation screen, basis-risk note) were open on every one of them, and the at-size executability detail was a paid read. Those surfaces were retired on 2026-09-05 with the rest of the rating. A packet URL that names a market now lands on that market's own page; any other packet address lands on the market finder. What a per-market page still carries is the venue's own stated resolution rule text, the resolution mechanics and the chain settlement read: facts about how a market resolves, not a reading of it.