A deadline market loses a little every day nothing happens
Contracts that ask whether something happens by a date are priced on the time left, not just the likelihood. Here is what that decay does to the price, the opening band and a drawdown that counts open profit.
A large share of event contracts ask the same kind of question. Not will this happen, but will this happen by a stated date. A deal signed by the end of the month. An announcement before a deadline. A figure crossed by year end.
Those contracts behave differently from ones that settle on a single scheduled print, and the difference is about time. With each day that passes without the thing happening, there is one day less in which it can happen. The fair price of YES falls even if nothing in the world has changed.
Time left is part of the price
A simple model shows the shape. Suppose the chance of the event happening in any given week is the same, call it h, and weeks are independent. Then the chance it happens at least once before the deadline is:
P(by deadline) = 1 − (1 − h)^(weeks remaining)
Here is an illustration. The numbers are invented to show the method, not drawn from any real market. Take h at 10 percent a week and a deadline four weeks away:
| Weeks remaining | Fair YES price | Fair NO price |
|---|---|---|
| 4 | 34 | 66 |
| 3 | 27 | 73 |
| 2 | 19 | 81 |
| 1 | 10 | 90 |
Nothing happened in that table. No news, no change in how likely the event is in any given week. The YES price still fell by more than two thirds, because the window it was pricing shrank.
Real events are rarely that tidy. A scheduled vote or meeting concentrates the chance into one day, and some things become more likely as a deadline creates pressure. A scheduled announcement does not walk the price covers what happens on those days. The direction holds regardless: if the event has not happened, a later moment in the same window is worth less to YES than an earlier one.
The two sides resolve on different clocks
Read the rules on any deadline market, because they decide this. In the usual drafting, YES resolves as soon as the event happens and is confirmed by the named source. NO cannot resolve until the deadline has passed, because until then the event could still happen.
So the two sides of the same contract have different expected holding periods. A YES holder who is right may be paid early. A NO holder who is right waits for the deadline, and then for the resolution process after it. On this venue that runs through an oracle with a challenge window, and what the resolution criteria decide explains what a dispute adds.
Inside a 30-day evaluation, that asymmetry is concrete. A NO position on a deadline that falls after your window ends cannot settle inside it at all. Whatever it contributes has to come through its mark, or through closing it into whatever book exists at the time. Markets must resolve within 60 days to be eligible, but eligibility and settling inside your window are different tests.
Decay walks contracts out of the opening band
Opening orders are accepted between 0.20 and 0.80. Look at the table again. Two weeks out, YES is at 19 and NO is at 81. Neither side can be opened.
That is a common pattern on deadline markets. They often open inside the band, then drift out of it as the date approaches without news. You can still hold or close a position you already have, because closing orders may fall outside the range. You cannot add to it or start one. If a deadline market is going to be useful to you, it tends to be early in its life, when the outcome is furthest away.
Ladders, and why later dates cost more
Venues often list the same question at several deadlines: by one date, by a later one, by a later one still. On Polymarket these are commonly built as one event holding a market for each date.
The prices across a ladder have to line up in one direction. Anything that happens by the earlier date has also happened by the later one, so YES on a later date should never be cheaper than YES on an earlier date. When a ladder appears to break that, check the offer on each rung, not the tile, before concluding anything. The number on the tile explains why the displayed figure may not be tradeable.
If the dates do sit under one event, they share one ceiling. Maximum profit from any single event is 0.5% of account size, and every market inside an event aggregates against it. Three dates are three tickets and one cap.
Holding NO while the price decays
The decay is not only a pricing curiosity. It interacts with how drawdown is measured.
Every account limit is equity-based, and the maximum drawdown is 6% of account size, trailing an equity high-water mark that never locks. A NO position on a deadline market tends to gain steadily while nothing happens. That open gain raises your peak, and the floor follows it up.
Work it through on a 50,000 account, where the per-event ceiling is $250.
Buying NO at 66, the outlay that reaches the ceiling exactly is
250 × 0.66 ÷ 0.34 = $485.29, with $4.85 of commission on top. Three weeks
later, with nothing having happened, NO is at 90 and the position is marked at
about $662. Then the event happens in the final week. NO goes to zero.
You paid $485.29. The drawdown measured from your peak is about $662, because the rules counted the open gain as yours before taking it away. Crypto volatility and a drawdown that counts open profit works through the same mechanic in a different market.
What to take from it
None of this is a reason to trade deadline markets or to avoid them. It is what their prices are made of.
Price the window, not just the event. A view that something is likely needs a second half: likely within how much time, and how is that chance spread across the days left.
Check which side waits. Before sizing, note when each side could actually resolve, and whether that falls inside your evaluation window.
Treat decay on NO as open profit, because the rules do. A position that gains quietly for three weeks has moved your floor for three weeks. Size it for what it would cost from its peak mark, not from its entry.
Evaluations are conducted on simulated accounts. Not financial advice.