Prediction Market Consensus — Explained

Consensus is the aggregated signal from many markets — more stable than any individual price, and faster to update than surveys or expert forecasts.

Why individual market prices aren't enough

Each prediction market operates independently. They have different participant pools, different liquidity, and different reaction times to breaking news. On any given event, Market A might show 62% while Market B shows 54% — a meaningful 8-point spread.

Using one market's price alone means inheriting its biases. Consensus solves this by aggregating across sources.

How consensus is calculated

Meridian Edge combines prices from multiple sources using a volume-weighted methodology. Markets with more active participation receive more weight. Very recent trades receive higher recency weights to ensure the consensus reflects current information.

The result is a single probability — say, 0.61 — that represents the collective view of all contributing markets at a given moment.

What divergence tells you

When markets disagree by more than 3%, the Meridian Edge API flags it as a divergence signal. Common causes:

Divergence doesn't guarantee an informational signal — it's a research signal, not a recommendation.

Example: NBA game consensus

{"event": "Lakers vs. Warriors",
 "consensus_prob": 0.61,
 "confidence": 0.87,
 "market_count": 4,
 "divergence_pct": 0.04,
 "resolution": "2026-04-01T02:30:00Z"}

Here, four markets contribute to a 61% consensus. Confidence of 87% means markets are broadly aligned. Divergence of 4% is slightly elevated — worth watching if you see it alongside breaking news.

Frequently asked questions

What is prediction market consensus?

Prediction market consensus is a single aggregated probability estimate computed by combining prices from multiple independent prediction markets for the same event. It reduces the noise of any individual market and provides a more stable, calibrated probability estimate.

How is consensus calculated?

Meridian Edge uses a volume-weighted aggregation that combines market prices, liquidity depth, and recency. Markets with higher liquidity and more recent activity receive higher weights. The result is a probability between 0 and 1 representing the crowd's collective estimate.

What does divergence mean in prediction market consensus?

Divergence is the spread between the highest and lowest probability estimates across contributing markets for the same event. A divergence above 3–5% often signals that new information has reached some markets but not others — a potential research opportunity.

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