Marriage & Divorce
Marriage and divorce are the mechanisms that create and destroy shares on TPX. They're fundamental to how prediction markets work.
Marriage: Creating Shares
When a buyer wants YES shares and another buyer wants NO shares, their orders can be “married” together. The system combines their money to create one YES share and one NO share, giving each trader what they want.
Example:
- Alice bids 60¢ for YES shares
- Bob bids 40¢ for NO shares
- Together they contribute $1.00 (60¢ + 40¢)
- The system creates 1 YES share for Alice and 1 NO share for Bob
Marriage only happens when the sum of YES and NO prices equals or exceeds $1.00. This ensures there's enough money to pay out the winner when the market resolves.
Divorce: Redeeming Shares
If you hold both YES and NO shares in the same market, you can “divorce” them to get $1.00 back. This is because one of them is guaranteed to pay out — so together they're always worth exactly $1.00.
Why divorce? Sometimes you might accumulate both YES and NO shares through trading. Divorcing them frees up your capital immediately instead of waiting for market resolution.
Why This Matters
Marriage and divorce ensure that TPX always has liquidity. Even if no one is selling YES shares, you can still buy them as long as someone is willing to take the other side (NO). This makes prediction markets more efficient than traditional betting.