# Up or Down Markets Explained

> Polymarket's up or down markets ask whether a coin finishes a short window above its start price. Learn the round lengths, settlement sources, pricing and risks.

Source: https://learn.tradelabsai.com/prediction-markets/up-or-down-markets-explained/  
Track: Prediction Markets · Level: Beginner · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Up or Down Markets Explained", https://learn.tradelabsai.com/prediction-markets/up-or-down-markets-explained/

Up or down markets are Polymarket's fastest markets. Each one asks a simple question about a crypto price over a fixed window: will the price at the end be higher than or equal to the price at the start? If yes, "Up" shares pay $1; if not, "Down" shares pay $1. Rounds run back to back, so a new market opens as soon as the last one closes. They attract traders who want short, frequent, crypto linked trades, and they behave very differently from long dated political or sports markets.

## The basics

| Feature | Details |
|---|---|
| Coins | Major coins such as Bitcoin, Ethereum, Solana, XRP and Dogecoin |
| Round lengths | 5 minutes, 15 minutes, 1 hour, 4 hours and daily |
| Outcomes | Up or Down |
| Starting reference | The [Price to Beat and How Rounds Settle](https://learn.tradelabsai.com/prediction-markets/price-to-beat/), the price at the window's start |
| Winner | Up if the end price is greater than or equal to the start, otherwise Down |
| Payout | $1 per winning share |

## What each round settles on

The rules for each round name the exact price source, and they differ by round length:

| Round length | Settlement source (per Polymarket's rules) |
|---|---|
| 5 minute, 15 minute, 4 hour | A Chainlink price feed for the coin against the US dollar |
| 1 hour | The Binance 1 hour candle for the coin against USDT (close vs open) |
| Daily | A Binance 1 minute candle close at a set time each day |

This matters because different sources show slightly different prices. The price on your exchange app is not always the price the market settles on. Read the rules of every market you trade, because sources and details can change.

## How the price moves during a round

At the start of a round, Up and Down usually trade near 50¢ each, because the price has an even chance of finishing above or below its starting level. As the round progresses:

- If the coin rises above the price to beat, Up rises in value and Down falls.
- The closer to the end, the more each small price move matters, because there is less time for it to reverse.
- With seconds left and the price well above the price to beat, Up may trade at 95¢ or more.

**Example: A 15 minute round**
Bitcoin's price to beat for a 15 minute round is $100,000. Five minutes in, Bitcoin trades at $100,150, and Up trades at 68¢. With one minute left, Bitcoin is $100,120 and Up is 88¢: the margin is smaller, but less time remains for it to drop $120. If Bitcoin finishes at $100,030, Up wins and each share pays $1. A trader who bought Up at 68¢ makes 32¢ per share; one who bought Down at 32¢ loses it all.

## What drives the odds

The fair value of Up depends mainly on three things:

1. **Distance** between the current price and the price to beat.
2. **Time left** in the round.
3. **Volatility:** how much the coin typically moves in the remaining time. See [Volatility](https://learn.tradelabsai.com/markets/volatility/).

These are the same inputs that price a binary option, which pays a fixed amount if the price is above a level at expiry. See [Binary Options](https://learn.tradelabsai.com/options/binary-options/).

## Settlement details

- **Rounds chain together:** the end price of one round is the price to beat of the next.
- **Ties go to Up:** an end price exactly equal to the start counts as Up under the rules.
- **Settlement is automatic** for rounds settled by a price feed, so there is usually no human proposal or dispute.

## Risks specific to short rounds

- **Speed and noise:** over 5 or 15 minutes, crypto prices are close to random, so any edge is small.
- **Spreads and fees** take a bigger share of small, fast trades.
- **Feed differences:** watching the wrong price source can mislead you near the end of a round.
- **Gambling style behaviour:** back to back rounds make it easy to chase losses. See [Revenge Trading](https://learn.tradelabsai.com/psychology/revenge-trading/) and [Gambler's Fallacy](https://learn.tradelabsai.com/psychology/gamblers-fallacy/).

**Watch out: Set limits before you start**
Decide a maximum stake per round and a daily loss limit, and stop when it is reached. See [Maximum Trade Risk and Daily Loss Limits](https://learn.tradelabsai.com/risk/daily-loss-limit/).

## Watching rounds live

It helps to see the price to beat, the current price from the same source and the market odds together. The [TradeLabs AI chart](https://tradelabsai.com/chart) shows each Polymarket round on the candles with its price to beat and live odds, which makes it easier to understand how distance and time drive prices.

## Frequently asked questions

### What are Polymarket up or down markets?

Short markets that ask whether a crypto price will finish a fixed window at or above its starting price. Up shares pay $1 if it does; Down shares pay $1 if it does not.

### What happens if the price ends exactly at the price to beat?

Under Polymarket's rules for these markets, an end price equal to the start counts as Up.

### Which price do up or down markets use?

It depends on the round length. Shorter rounds settle on a Chainlink price feed; hourly and daily rounds have used Binance candles. Always check the market rules.

Next, learn exactly how the starting level is set in [Price to Beat and How Rounds Settle](https://learn.tradelabsai.com/prediction-markets/price-to-beat/).

## Continue learning

- Next lesson: [Price to Beat and How Rounds Settle](https://learn.tradelabsai.com/prediction-markets/price-to-beat/)
- Previous lesson: [Reading Odds as Probabilities](https://learn.tradelabsai.com/prediction-markets/reading-odds-as-probabilities/)
- Related: [Reading Odds as Probabilities](https://learn.tradelabsai.com/prediction-markets/reading-odds-as-probabilities/): Learn to turn prediction market prices into probabilities, adjust for spreads and long shot bias, compare with your own estimate and find value with expected value.
- Related: [Price to Beat and How Rounds Settle](https://learn.tradelabsai.com/prediction-markets/price-to-beat/): The price to beat is the start price an up or down round must match or beat for Up to win. Learn where it comes from and why it differs from your exchange.
- Related: [How Polymarket Works](https://learn.tradelabsai.com/prediction-markets/how-polymarket-works/): A clear guide to how Polymarket works: Yes and No shares, the order book, USDC, fees, how markets resolve through UMA and Chainlink, and the risks to know.
- Related: [Gambler's Fallacy](https://learn.tradelabsai.com/psychology/gamblers-fallacy/): The gambler's fallacy is believing past random outcomes change future odds. Learn how it shows up after streaks and in prediction markets, and how to avoid it.
- Related: [Volatility](https://learn.tradelabsai.com/markets/volatility/): Volatility measures how much and how fast prices move. Learn historical and implied volatility, ATR, the VIX, why volatility clusters and how it affects risk.
- Related: [Prediction Market Strategies and Risks](https://learn.tradelabsai.com/prediction-markets/prediction-market-strategies/): Learn practical prediction market strategies: research based value betting, news trading, arbitrage, market making and short round tactics, with risk rules for each.