Trading
Trading Guide
8 min read
Why does the price change when I buy?
Settled uses a Logarithmic Market Scoring Rule (LMSR) automated market maker. There is no orderbook. You trade directly against the AMM, and every trade shifts the price.
Here is how it works. A market opens with YES at 73 cents. You buy 100 YES shares for $73. After your trade, YES moves to 76 cents, because LMSR adjusts prices based on the ratio of YES and NO shares outstanding. The more shares on one side, the more expensive that side becomes.
This matters for large positions. Buying $500 of YES moves the price more than buying $10. Check the trade panel before confirming. It shows your effective price per share after slippage.
What does the OU confidence score tell me?
Every market shows an OU confidence score between 0% and 100%. This is the model's R² fit for that specific symbol, calculated from 9.4 million historical settlements. It measures how predictable this symbol's funding rate is.
Above 80% — the model is highly confident. Historical rates are consistent and trend-following. Finding mispricing is harder here.
60–80% — moderate confidence. Real signal exists, but noise too. Informed traders with context the model lacks can find value.
Below 60% — the model is close to guessing. These markets reward traders who understand the specific token's current dynamics.
How does settlement timing affect strategy?
Hyperliquid (1h) — 24 data points per day. Rates are more volatile. Rewards faster reactions, accepts more variance.
Binance/Bybit/KuCoin (8h) — settles at 00:00, 08:00, 16:00 UTC. Rates have time to stabilize. The OU model performs better here. More predictable, better for systematic strategies.
KuCoin (4h) — sits between the two extremes.
Practical rule: in trending markets, 1h intervals can sustain the same direction for 10–15 rounds. In choppy markets, 8h intervals are more stable.
Why do prices differ across exchanges?
BTC/USDT on Binance and BTC/USDT on Bybit are separate markets. Different traders, different leverage ratios, different liquidity. Their rates diverge regularly.
When BTC sentiment shifts bullish, Binance might trade YES at 73¢ while Bybit trades YES at 61¢. If you believe the pressure is broad-based, Bybit YES at 61¢ offers better value — same directional outcome, 12¢ discount.
Cross-exchange divergence is one of the clearest sources of edge on Settled.
How do I find markets worth trading?
The OU model sets opening prices. Your edge comes from knowing something the model does not. Four situations:
1. Model says 89% YES but market is at 73¢ — 16¢ gap means traders disagree. If you trust the model, YES at 73¢ offers value.
2. Funding spiking on Bybit but flat on Binance — the Binance market hasn't priced in cross-exchange pressure yet.
3. Major liquidation cascade in the last 2 hours — the OU model may not have captured the shift. Check the live rate on the exchange directly.
4. Low-confidence symbol at 50¢ — if you have token-specific context (unlock, listing, arbitrage), your bet may outperform the model.
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