Does Polymarket predict the stock market?
By Faizan Ahmad. Updated .
Not better than options do: Tradytics' study of its archive of 5.95 million Kalshi and Polymarket markets found that people's chances on S&P 500 and Nasdaq closes match what same-day options price, and that Polymarket's daily "up or down" questions picked the right side 56% of the time, about as often as the market simply rises. What prediction markets add is questions options can't price on their own: will a company beat, will the Fed cut, where will CPI print.
What Kalshi and Polymarket price on the S&P 500
- The close. Ladders ("S&P 500 at or above a level at 4pm") and ranges for the day's close.
- Further out. Where the index ends a week, a month, a quarter and the year.
- Direction. A daily up or down question.
Read together, they give a full outlook: Tradytics Probabilities draws where people put the S&P 500 at the next close, Friday, month end, three months and year end.
How it compares with options
| Question | What prediction markets show |
|---|---|
| Where the S&P 500 or Nasdaq closes today | The same as same-day options: an average gap of 4 to 6 points per strike, 56 to 72% of strikes within 5 points |
| How wide the close can land | 1.01 to 1.03 times the range same-day S&P options price |
| Up or down tomorrow | Right 56% of the time, worse than calling every day 50/50 |
| Next quarter hour or to the close | Who buys which side says nothing about SPY or QQQ; the flow follows SPY's own move a little late |
The tie is mechanical: whoever quotes the index questions can hedge in SPX options, so the two prices stay together. Even the Polymarket wallets best at pricing their contracts called the stock or index after their trades right 46 to 54% of the time.
What prediction markets add
Options price a range for the stock. They don't ask whether a company will beat, whether the Fed will cut, or where CPI prints. Prediction markets do:
- Earnings beats. On 1,307 Polymarket beat questions, companies beat 73.9% of the time and the crowd sorted which ones well: names it put under 50% beat 34.2% of the time, names at 85 to 95% beat 89.9%.
- The Fed, CPI and jobs. Each release gets its own chances, and Probabilities marks those dates on the S&P 500 time line.
A beat is not a rise. Across 7,196 reports from the 368 companies behind those questions, the stock rose after 54.6% of beats and 36.5% of misses. A beat by 0 to 5% rose only 45.6% of the time; a beat by 15% or more, 59.8%. And the crowd's beat chance an hour before the report had no relation to the reaction. More on the numbers: how accurate prediction markets are.
Where to see it
Tradytics Probabilities reads every live finance question on Kalshi and Polymarket: the S&P 500 outlook as a fan over three months of candles with jobs, CPI and Fed dates marked, a page per question with the chance of each outcome, and earnings questions with each stock's past report-day moves. The S&P 500 and Nasdaq are free; Plus ($39 a month) and Pro ($69) show every stock and report. Details: Tradytics Probabilities.
Common questions
Can Polymarket predict where the S&P 500 closes?
As well as same-day options do, and no better: on index closes the two put the same chances on each level.
Does Kalshi predict the stock market better than options?
No. Kalshi's S&P 500 and Nasdaq close chances match same-day options strike by strike.
Does a high earnings-beat chance mean the stock will rise?
No. The crowd's beat chance had no relation to the report-day move, and stocks rose after only 54.6% of beats.
Where can I see Polymarket's S&P 500 outlook?
At tradytics.com/probabilities, free: the next close, Friday, month end, three months and year end, from Kalshi and Polymarket together.