Your first position, step by step

Before you start

You need an approved, funded account. Most applications are approved in minutes, and a linked bank deposit is usually ready to trade right away. How to trade on Lumina → covers the account and funding steps.

Pick the contract

A market is a question. Many questions have more than two possible answers, so a market often holds several contracts, one per answer:

Each of those contracts is its own Yes-or-No question with its own price (finding markets → covers how markets are built). Pick the one that matches the view you actually hold. A trader who expects a hot day but not a record one might look at Above 86°F rather than Above 92°F.

Read the rules

Open the market's rules before anything else. They state the source, the exact measure, and the date that decide the outcome. The Los Angeles market settles on the maximum temperature recorded for a designated station on Weather Underground for that date. A higher reading somewhere else in the city doesn't count, and neither does the forecast.

The rules also link the exchange's full terms. How a prediction market resolves → covers the four things every set of terms pins down and how each one can surprise you.

Yes or No

Both sides of a contract trade, and their prices add up to about $1. If Yes on Above 86°F is 47¢, No is around 53¢. Exactly one side pays $1.

Buying Yes is how a trader expresses the view that the outcome is more likely than 47% suggests; buying No, that it's less likely. There's no third option and no way to sell a contract you don't hold. Taking the view that something won't happen means buying No. How to read a prediction market price → covers what the price is telling you.

The order ticket, field by field

The transaction fee, $0.01 per contract, and Lumina's commission, 0.35% of the trade value, are charged at execution (fees →). Sizing and pricing → covers when a market order and when a limit order fits, and why the price you pay is the ask.

A worked trade (illustrative prices)

You place a limit order for 20 Yes contracts at 47¢ on Above 86°F, and it fills.

• You pay $9.40 for the contracts, a $0.20 transaction fee and a $0.0329 commission: $9.6329 in total.
• The position pays $20.00 if the high comes in above 86°F, and $0 if it doesn't.

Held to settlement, there are two outcomes:

• Yes: you receive $20.00, which is $10.3671 more than the $9.6329 you paid.
• No: you lose the $9.40 you paid plus the $0.2329 in fees and commission.

Statements and confirmations show these amounts rounded to the cent.

After the order fills

A filled order becomes a position in your portfolio, showing the contracts you hold and their current value. An order that hasn't filled yet is a working order in Open Orders, where you can cancel it. A limit order can fill in parts; you'll see the filled quantity and the average price so far while the rest keeps working.

A filled order can't be undone. If you change your mind about a position, sell it.

Holding or selling

You don't have to wait for the question to be decided. While the market is open you can sell some or all of the contracts you hold, at whatever price someone is willing to pay.

Sell is carried out as a purchase of the other side. ForecastEx, the exchange every Lumina order executes on, has no sell order. Selling 20 Yes contracts buys 20 No contracts in the same market, and the exchange nets the Yes and No holdings against each other, which closes the position. Because a sale buys the other side, selling needs enough cash in your account to pay for those contracts; the $1.00 per pair comes back once the two positions net. You can sell only up to the number of contracts you hold. The sale is a second execution, so it pays its own $0.01 per contract and its own commission.

Carrying the worked trade forward, both ways:

• If Yes rises to 60¢ and you sell all 20, you receive $12.00. After the two transaction fees and commissions, that's $2.1391 more than you paid.
• If Yes falls to 30¢ and you sell all 20, you receive $6.00. After the two transaction fees and commissions, that's $3.8819 less than you paid.

Selling early fixes the result at the price you sell at, in either direction. Holding means the outcome decides it. Settlement and resolution → covers what happens at the end, and fees → covers the cost of each route.