Prediction Market Glossary
Key terms and metrics used across the Merlin platform and Polymarket prediction markets.
This glossary defines key prediction market terms and Merlin-specific metrics used throughout the platform. From P&L and ROI to Merlin Trader Score and Whale Tiers — find clear, concise definitions of every metric you'll encounter on the Polymarket leaderboard.
P&L (Profit and Loss)
P&L measures the total USD profit or loss from all prediction market positions. On Polymarket, a positive P&L means the trader earned more from correct predictions than they lost on incorrect ones. P&L is the primary ranking metric on the Merlin leaderboard and is calculated across 24-hour, 7-day, 30-day, and all-time periods.
ROI (Return on Investment)
ROI is calculated as P&L divided by total trading volume, expressed as a percentage. A 50% ROI means the trader earned $50 in profit for every $100 traded. High ROI combined with high volume is the strongest indicator of consistently skilled prediction market trading.
Prediction Market
A prediction market is an exchange where participants trade contracts that pay out based on the outcome of real-world events. Prices between $0 and $1 reflect the market's collective probability estimate for each outcome. Polymarket is the largest crypto-native prediction market, settling all trades in USDC on the Polygon network.
USDC
USDC (USD Coin) is a stablecoin pegged 1:1 to the US dollar, issued by Circle. All Polymarket trades and settlements are denominated in USDC on the Polygon blockchain. When a prediction market resolves, winning shares pay out $1.00 USDC each.
Polymarket
Polymarket is the world's largest decentralized prediction market platform, built on the Polygon blockchain. It offers markets across politics, sports, crypto, economics, tech, culture, and finance. Merlin tracks Polymarket trader performance and provides copy-trading through its Telegram bot.
Trading Volume
Trading volume is the total USD value of all buy and sell orders executed by a trader across their prediction market positions. High volume indicates an active trader with significant capital deployment. On the Merlin leaderboard, volume can be viewed across 24-hour, 7-day, 30-day, and all-time periods.
Merlin Trader Score
The Merlin Trader Score is a proprietary composite metric (0–100) that evaluates overall trader quality. It weights all-time P&L at 35%, 30-day P&L at 25%, consistency across time periods at 20%, and average ROI at 20%. A score above 70 indicates a strong Polymarket trader.
Merlin ROI Rating
The Merlin ROI Rating grades a trader's capital efficiency with a letter grade: S-tier (≥50% ROI), A-tier (20–50%), B-tier (5–20%), C-tier (0–5%), and D-tier (negative ROI). This rating helps identify traders who generate the highest returns relative to their deployed capital.
Merlin Insider Score
The Merlin Insider Score (0–100) identifies traders who consistently profit on low-probability outcomes. It weights longshot win rate at 35%, frequency at 20%, normalized profit at 30%, consistency at 10%, and extreme entry bonus at 5%. A high Insider Score suggests potential informational edge.
Whale Tiers (Whale / Shark / Dolphin / Fish)
Whale Tiers classify traders by all-time trading volume. Whales have ≥$500K volume, Sharks $100K–$500K, Dolphins $10K–$100K, and Fish under $10K. These tiers help identify the scale at which a trader operates and the reliability of their performance metrics.
Copy Trading
Copy trading automatically replicates another trader's positions in real time. On Merlin, clicking "Copy Trade" on any leaderboard trader opens the @merlin0_bot Telegram bot with that trader's wallet pre-loaded, enabling automatic trade replication.
Equity Curve
An equity curve shows a trader's cumulative P&L over time. On Merlin trader profiles, the equity curve displays 90 days of daily aggregated profit and loss data. A steadily rising curve indicates consistent profitability, while high volatility signals riskier trading strategies.
Resolved Market
A resolved market is a prediction market whose outcome has been officially determined and settled. Winning shares pay $1.00 USDC and losing shares pay $0.00. Market resolution is handled by Polymarket's oracle system based on verified real-world outcomes.
Open Position
An open position represents shares a trader currently holds in an unresolved prediction market. Each position has a current market value based on live odds and an unrealized P&L showing paper profit or loss.
Unrealized P&L
Unrealized P&L is the paper profit or loss on positions not yet closed or resolved. Calculated as the difference between current market price and entry price, multiplied by position size. Becomes realized when the trader sells or the market resolves.
Market Odds / Probability
Market odds represent the prediction market's consensus probability for an outcome, derived from the current share price. A share trading at $0.75 implies a 75% probability. These odds continuously update as traders buy and sell based on new information.
Liquidity
Liquidity refers to how easily shares can be bought or sold without significantly moving the price. High-liquidity markets have tight bid-ask spreads and deep order books. Polymarket's most popular markets typically have the highest liquidity.
Order Book
The order book is a real-time list of all open buy and sell orders at various price levels. It shows available liquidity at each price point. Polymarket uses a hybrid order book model with on-chain limit orders matched by the protocol's matching engine.