🕹️ How to Trade

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🕹️ How to Trade
Trading on Augur Explained
Trading means buying or selling shares. The price of a share, between 1 and 99 cents, corresponds (roughly) to the market’s estimate of the probability of that event taking place. 
Example: The Donald Trump outcome in a presidential winner market trading at $0.51 indicates the market believes he has a roughly 51% probability of winning, at the given moment.
Buy shares in an outcome when you perceive the price as too low, or when you think your fellow traders are underestimating this likelihood. Sell shares, or 'short' the outcome when you think they are too optimistic.
The value of your shares will change over time. You may decide to sell your shares later on, either to take some profit or stop a loss. Or, you can hold onto your shares until the market closes. At that point, if the event in the market has taken place, shares will return $1. If it has not, sold (short) shares will return $1 instead.
You can get an idea of how prices correspond with implied probabilities and payouts below:
Augur Buy Price
Winning Payout
Payout Ratio
'American' Odds
Implied Probability
$0.10
$1.00*
9:1
+1000
10%
$0.25
$1.00*
3:1
+300
25%
$0.40
$1.00*
1.5:1
+150
40%
$0.50
$1.00*
1:1
+100
50%
$0.75
$1.00*
1:3
-300
75%
$0.90
$1.00*
1:9
-900
90%
Let's go step-by-step through the recommended trading process:
1.​View Market Details​
2.​Create Your Order​
3.​Place Order​
1: View Market Details
Once you've found a market you'd like to trade and are on the market's page, examine the market’s question and resolution details. 
Market Question and Resolution Details
Because Augur markets are created by other users, sometimes the markets can be made with errors. If a market has an error, it is at risk to resolve as invalid market; and shares in other outcomes will not pay. Therefore, It is important to make sure that:
The outcome will be known at market end time
The market question isn't subjective or ambiguous
The title, details, and outcomes are not in direct conflict with each other
The resolution source will provide a clear answer
Market Question
Next, you'll want to get an idea of the market's trading volume (how much has changed hands) and open interest (sum of trades matched). Make sure that the event expiration leaves time for the outcome to be made known and that you're comfortable with the market's fee (paid to market creators and reporters).
Market Details
View Outcomes
The outcomes section displays the choices that you have to bet for or against. You can toggle between order books and charts by selecting an individual outcome.
Bid/Ask Quantity: These numbers convey the quantity of shares (to either buy or sell) for a particular outcome that is available to be matched on the order book.
Best Bid/Ask: At any moment in time, the best bid is the highest price someone is willing to pay for shares in an outcome. The best ask is the lowest price someone is willing to sell their shares.
Last (price): is the most recent price paid by anyone trading on an outcome. 
Warning on Invalid Market
On Augur, because not all markets will be correctly formatted, "invalid market" is a trade-able outcome (more on why).
If a market resolves as "Invalid Market," every other outcome is paid $0. In order to quickly signal to traders that a market would resolve as 'Invalid,' it is a trade-able outcome on Augur. The app filters out markets with even a moderate chance of resolving as 'Invalid.'
If invalid market is trading for a high price, the market is signaling that it may not resolve cleanly. Even if invalid market is not trading for a high price, it is wise to be careful and scrutinize the market regardless.
A market is invalid if:
The market question, resolution details or its outcomes are ambiguous, subjective or unknown.
The result of the event was known at market creation time.
The outcome was not known at event expiration time.
It can resolve without at least one of the outcomes listed being the winner, unless it is explicitly stated how the market will otherwise resolve in the resolution details.
The title, details and outcomes are in direct conflict with each other.
Any of the outcomes are duplicates.
The market can resolve with more than one winning outcome.
Any of the outcomes don’t answer the market question ONLY. (outcomes cannot introduce a secondary question)
If using a resolution source (a source is a noun that reports on or decides the result of a market), the source's URL or full name is NOT in the Market Question, regardless of it being in the resolution details.
If using a resolution source, it is not referenced consistently between the Market Question and Resolution Details e.g. as either a URL or its full name.
Player or team is not in the correct league, division or conference, at the time the market was created.
Augur Markets:
Should resolve using general knowledge if the market does not have a resolution source in market question.
Cover events that occur between market start time and end time in the market question. If start time is not specified in the market question, market creation date/time is used. If no end time is specified in market question, the event expiration is to be used. If the event occurs outside of these bounds, the market should resolve as invalid
Outcomes must be unique from one and other within a market. If multiple outcomes share a common name, they must be easily distinguishable (ie. Serena Williams and Venus Williams)
Now, let's start your order!
2: Create Your Order
You can buy shares in an outcome if you believe it will occur or that the price of the outcome will rise from its current level. Or, you can sell shares if you believe the outcome will not occur or that the price of the outcome will fall from its current level.
Once you know the outcome that you’d like to trade, you can take and complete an order that someone else had already posted to the order book; or you can create and post a new order to the order book with the order form. 
Taking an Order from the Order Book
Selecting the other side of an order that someone has already made is known as 'taking' an order. In the order book, to the right of the screen, orders in red are sell orders (offers); the quantities shown are available to buy at the listed prices. The orders in green (bids) are orders from users who wish to buy shares; the quantities show how much you can sell to them at the listed prices.
Selecting an available taker order from the order book automatically fills your order ticket.
Note: Taker orders require you to pay a transaction fee
GIF
Making an Order in the Order Form
Alternatively, if you do not see an order you would like to take, you can create a new order. First, select which outcome you'd like to trade; and whether you'd like to buy or sell; from the dropdown in the order section.
Note: Maker orders do not require you to pay a transaction fee, BUT you may not have your order filled quickly or at all.
Outcome Selection Dropdown
Choose Quantity
Once you know the outcome you’d like to buy or sell, you may now choose the quantity of shares. 
Enter Price
Now, enter the price that you’d like to submit your buy or sell order for. Every share has a price range between $0.01 and $0.99 (where the price roughly corresponds with probability, $0.99 = 99%). Every winning share pays $1 (minus fees).
Review Total Order Value
This shows the amount of money required to make this trade. You can change this value to control the total cost of your order, and the quantity will adjust to compensate for the new total order value. So if you want to bet $40, enter 40 in here.
🔮Tip: Selecting 25%, 50%, 75%,or100%will compose a total order value equaling the corresponding percentage of your available funds by multiplying the chosen limit price multiplied by a quantity .
Selecting Clearwill clear your order form.
Review Order
Review your entire order and make sure everything looks correct.
Order Expiration
Order expiration allows you to set an expiration date which prompts the order to cancel. You can set the order expiration in numeric minutes, hours, days, or a custom interval.
🔮Tip: By default, your orders will be set to expire at the market's event expiration. You can manually cancel anytime prior to that date/time.
Alternatively, you can select the dropdown for expanded ordering options:
Fill Only: Fill Only orders will immediately fill up to the specified quantity of available shares. If the order is only partially filled, whatever amount of shares remaining on the order will be immediately canceled.

Post Only: The post-only limit order option ensures the limit order will be added to the order book and not matched with a pre-existing order. If your order would cause a match with a pre-existing order, your post-only limit order will not execute. Post-Only Limit Order ensures that you will not pay a transaction fee.
3: Place Order
If you are taking an order, placing the order by selecting the button should complete your trade.
🔮Tip: You will need to have enough funds to cover the cost of your trade + gas to place an order
If you are making a new order, once your order is matched by someone taking the other side, a trade is complete. If your order is not matched after some time, you may need to adjust the price of your offer.
Paying Trading Fees (Gas)
Augur runs on a peer-to-peer network which requires micro-fees to be paid for transactions such as making trades. This is different from the market fee, and this fee is paid to miners on the Ethereum network.
A gas payment is not required for unfilled orders posted to the order book, but if you take an order already posted to the order book, a fee will be charged to fill the order. 
This fee to miners is paid in a currency called ETH, but in order to improve the experience for users, Augur facilitates the ability for traders to only need to hold DAI for both trading and paying gas fees.
Congratulations, you've placed an order!
What Now?
Now that you own shares, you can view them on the portfolio page, buy more, trade them back, or wait till the market is finalized to claim your payout should you own winning shares.