A 40p quote on a hypothetical £1 yes contract suggests 40% before costs, if the contract settles at £1 for yes and zero otherwise. It does not mean a 40% result is independently measured. Someone had to be willing to quote or trade at that price; the visible number may represent little money.
Decimal odds and exchange prices
For simple decimal odds, the rough implied probability is 1 divided by the decimal odds. Decimal odds of 2.50 correspond to 40% before any exchange commission or margin. A £1-settlement contract trading at £0.40 gives the same rough number by a different display convention. Exact economics depend on stake, liability, fees and whether you buy or sell.
Why “the probability” is an overstatement
The best buy and sell quotes may differ. If buyers offer 39p and sellers ask 43p, there is no single cost-free 41p trade. A low-volume market can move sharply on one order, while a fast-moving event can leave stale quotes behind. For the market to function as a forecast, it must attract enough informed, independent participants and a question that can be resolved consistently.
Use a price as one input
Compare it with the underlying evidence, publication time and settlement wording. Do not present a contract price as a certified prediction or confuse a percentage with an expected return. See how markets work for order matching and liquidity for what may be hidden behind the headline quote.
Do implied probabilities forecast well?
Our accuracy evidence review compares historic election and economic forecasts and explains Brier scores. It also shows why a last-minute quote cannot be compared casually with an earlier forecast. This US-focused research complements, rather than replaces, the price mechanics above.