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--- developers:predictionmarkets [2026/04/29 19:45] – created chad
+++ developers:predictionmarkets [2026/08/27 19:07] (current) – chris
@@ Line 1: / Line 1: @@
-Comin soon
+====== Prediction Markets ======
+Prediction markets on the T4 platform are binary-outcome instruments that settle at either **0** or **1** (expressed as a price). This page explains how to interpret settlement messages so your application can correctly determine the outcome of a prediction market trade.
+===== Overview =====
+Unlike traditional futures contracts, prediction market instruments resolve to one of two discrete values at expiration:
+  * **1** -- The event occurred; the "Yes" side wins.
+  * **0** -- The event did not occur; the "No" side wins.
+When a prediction market settles, the T4 platform generates a synthetic order update on the **opposite side** of your position at the settlement price. Your application should watch for this message to determine whether a held position resolved in or out of the money.
+===== Settlement Mechanics =====
+==== How Settlement Works ====
+At market expiration, T4 will evaluate the outcome and issue a closing order update for each open position. The message will always be:
+  * **Side** -- Opposite of your open position (long positions receive a sell; short positions receive a buy).
+  * **Price** -- Either **0** (lost) or **1** (won), expressed in the instrument's native price format. See [[developers:systempricing|System Price Format]].
+  * **Order Type** -- ''[TBD -- settlement order type tag/value]''
+  * **Quantity** -- Equal to your open position size.
+==== Outcome Matrix ====
+^ Your Position ^ Settlement Price ^ Outcome ^
+| Long           | 1                | Won -- event occurred |
+| Long           | 0                | Lost -- event did not occur |
+| Short          | 1                | Lost -- event occurred |
+| Short          | 0                | Won -- event did not occur |
+===== Identifying a Settlement Message =====
+Your application should identify a settlement message by checking for the following combination of fields in an order update:
+  - The instrument is a prediction market type. See [[developers:websocket:markets|Market Data & Definitions]] for how to identify prediction market instruments.
+  - The order update represents a closing fill (opposite side of the open position).
+  - Price is exactly **0** or **1**.
+  - Order type is ''[TBD]''.
+<WRAP callout>
+**Note:** Settlement messages are generated by the platform and do not represent a resting order in the book. They will not appear in the order book feed and should be treated as system-generated close events.
+</WRAP>
+===== FIX API =====
+Settlement is communicated via an **Execution Report (tag 35=8)** on the FIX session. The report will reflect the closing fill at the settlement price.
+For full FIX tag definitions see [[developers:fixapi:start|FIX API]].
+==== Key FIX Tags ====
+^ Tag ^ Field Name        ^ Settlement Value ^
+| 1   | Account            | Account holding the position being settled |
+| 8   | BeginString        | FIX protocol version in use |
+| 9   | BodyLength         | Number of bytes in message body |
+| 10  | CheckSum           | Three-digit checksum for message validation |
+| 11  | ClOrdID            | Client-assigned order identifier for the settlement order |
+| 14  | CumQty             | Cumulative quantity filled so far |
+| 17  | ExecID             | Unique identifier for this execution |
+| 21  | HandlInst          | Order handling instruction (automated, no intervention) |
+| 31  | LastPx             | Price of the last fill; 0 or 1 for settlement |
+| 32  | LastQty            | Position size being closed |
+| 34  | MsgSeqNum          | Sequence number of this message in the session |
+| 35  | MsgType            | 8 (Execution Report) |
+| 37  | OrderID            | Identifier assigned by broker/exchange for the settlement order |
+| 38  | OrderQty           | Total quantity of the settlement order |
+| 39  | OrdStatus          | Order Status |
+| 40  | OrdType            | Order Type |
+| 44  | Price              | 0 or 1 |
+| 48  | SecurityID         | Identifier for the underlying contract/instrument |
+| 49  | SenderCompID       | Identifier of the sending firm/system |
+| 50  | SenderSubID        | Sub-identifier of the sending system |
+| 52  | SendingTime        | Timestamp the message was sent |
+| 54  | Side               | Opposite of open position (1=Buy, 2=Sell) |
+| 55  | Symbol             | Prediction market instrument identifier |
+| 56  | TargetCompID       | Identifier of the receiving firm/system |
+| 59  | TimeInForce        | Duration the settlement order remains valid |
+| 60  | TransactTime       | Timestamp of the actual transaction/execution |
+| 97  | LocateReqd         | Whether a locate was required (relevant for short positions) |
+| 107 | SecurityDesc       | Name of the contract |
+| 151 | LeavesQty          | Remaining quantity left to be filled (0 once fully settled) |
+| 167 | SecurityType       | Type of instrument (e.g., option) being settled |
+| 200 | MaturityMonthYear  | Contract expiration month/year |
+| 201 | PutOrCall          | Indicates whether contract is a put or call |
+| 204 | CustOrderCapacity  | Capacity in which the order was entered (customer/firm) |
+| 207 | SecurityExchange   | Exchange where the contract is listed/settled |
+| 447 | PartyIDSource      | Source/type of identifier used for the party |
+| 448 | PartyID            | Identifier of the party involved in settlement (e.g., administrator) |
+| 452 | PartyRole          | Role of the identified party in the settlement process |
+| 453 | NoPartyIDs         | Number of party ID entries included in the message |
+==== Example: Won (Long Position, Settles at 1) ====
+<code>
+<< 8 : 1=ExampleAccount| 8=FIX.4.2 | 9=451 | 10=180 | 11=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | 14=1 | 17=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854_0_T | 21=1 | 31=0 | 32=1 | 34=70 | 35=8 | 37=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | 38=1 | 39=2 | 48=Contract Ticker | 49=test | 50=T4FIX | 52=20260827-15:15:45.148 | 54=2 | 55=Market | 56=TradeBook | 59=0 | 60=20260827-15:15:45.147 | 97=Y | 107=Example Contract Name | 150=F | 151=0 | 167=OPT | 200=202608 | 201=1 | 204=0 | 207=Exchange Name | 447=D | 448=Administrator | 452=44 | 453=1 |
+[9=451|35=8] EXECUTION: Market **SELL 1@1** | Order=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | Filled=1/1@0 | Remaining=0 | Status=Filled
+</code>
+==== Example: Lost (Long Position, Settles at 0) ====
+<code>
+<< 8 : 1=ExampleAccount| 8=FIX.4.2 | 9=451 | 10=180 | 11=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | 14=1 | 17=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854_0_T | 21=1 | 31=0 | 32=1 | 34=70 | 35=8 | 37=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | 38=1 | 39=2 | 48=Contract Ticker | 49=test | 50=T4FIX | 52=20260827-15:15:45.148 | 54=2 | 55=Market | 56=TradeBook | 59=0 | 60=20260827-15:15:45.147 | 97=Y | 107=Example Contract Name | 150=F | 151=0 | 167=OPT | 200=202608 | 201=1 | 204=0 | 207=Exchange Name | 447=D | 448=Administrator | 452=44 | 453=1 |
+[9=451|35=8] EXECUTION: Market **SELL 1@0** | Order=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | Filled=1/1@0 | Remaining=0 | Status=Filled
+</code>
+==== Example: Won (Short Position, Settles at 0) ====
+<code>
+<< 8 : 1=ExampleAccount| 8=FIX.4.2 | 9=451 | 10=180 | 11=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | 14=1 | 17=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854_0_T | 21=1 | 31=0 | 32=1 | 34=70 | 35=8 | 37=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | 38=1 | 39=2 | 48=Contract Ticker | 49=test | 50=T4FIX | 52=20260827-15:15:45.148 | 54=2 | 55=Market | 56=TradeBook | 59=0 | 60=20260827-15:15:45.147 | 97=Y | 107=Example Contract Name | 150=F | 151=0 | 167=OPT | 200=202608 | 201=1 | 204=0 | 207=Exchange Name | 447=D | 448=Administrator | 452=44 | 453=1 |
+[9=451|35=8] EXECUTION: Market **BUY 1@0** | Order=CB7ED23B-1D2F-4652-BE77-DF16DB3ED854 | Filled=1/1@0 | Remaining=0 | Status=Filled
+</code>
+===== P&L Calculation =====
+Settlement P&L for a prediction market position is straightforward:
+  * **P&L per contract** = (Settlement Price - Entry Price) * Contract Multiplier * Quantity
+  * For a long at entry price 0.60 settling at 1: (1 - 0.60) * [multiplier] * qty = profit
+  * For a long at entry price 0.60 settling at 0: (0 - 0.60) * [multiplier] * qty = loss
+<WRAP callout>
+**Note:** Confirm the contract multiplier for each prediction market instrument via the [[developers:markets|Instruments API]].
+</WRAP>