# Event contract

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Canonical: https://novigapi.com/learn/event-contract

An event contract is a financial contract that pays a fixed amount if a specified event happens and nothing if it does not.

```
profit_if_yes = (1 - price) x contracts; loss_if_no = price x contracts
```

An event contract turns a question about the future into something you can buy and sell. Will this team win? Will this player score more than 22.5 points? The Yes contract pays a fixed amount, typically $1, if the answer is yes, and $0 if not. The No contract pays the reverse. The price of a Yes contract, between $0 and $1, is the market's probability that the event happens. In the United States, event contracts traded on a designated contract market fall under the Commodity Futures Trading Commission.

## How it works

Because Yes and No together always pay exactly $1, their fair prices add to $1. A Yes contract at $0.62 implies a 62% chance and is matched by a No contract at $0.38. You can buy, then sell before settlement to take a profit or cut a loss, or hold until the event settles. Each contract's payoff is fixed, so the risk is clear before you buy: you can lose at most what you paid.

## Worked example

Buying $100 of Yes payout (100 units of $1) at 62%

| Item | Amount |
| --- | --- |
| Cost (100 x $0.62) | $62.00 |
| Payout if Yes | $100.00 |
| Profit if Yes | $38.00 |
| Loss if No | $62.00 |
| Equivalent American odds | -163.2 |
| Equivalent decimal odds | 1.613 |
| Taker fee if bought in-game (0.06 x 0.62 x 0.38 x 100) | $1.41 |


The price, 62%, converts to American odds of -(0.62 / 0.38) x 100 = -163.2. The [Novig odds converter](https://novigapi.com/novig-odds-converter) does this conversion with and without the fee.

## On Novig

Novig lists sports outcomes as event contracts. Prices appear as percentages, so a 62% price costs $0.62 for every $1.00 of payout. A market has two outcomes, each with its own bids, and the ask on one is 1 minus the best bid on the other. Watch the units: per [Novig trading fees](https://docs.novig.com/api/concepts/fees) (checked 12 Nov 2026), one contract in Novig's v3 API pays 1 cent, so the $1.00-payout units on this page are 100 API contracts each, and the 100 units in the table above appear as a quantity of 10,000. The taker fee is 0.06 x P x (1 - P) x N x $0.01 for N API contracts, which is 0.06 x P x (1 - P) per $1 of payout. Novig's own example: 10,000 contracts at 0.50 pay $1.50. On game markets the fee applies only while the event is live.

## When it matters

- Exiting early: you can sell a contract back before settlement, which a sportsbook ticket rarely allows.
- Settlement rules: read how voids, overtime and player absences settle, especially on player props.
- Comparing prices: a contract price is a probability, so you can compare it directly with a devigged sportsbook price.

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