What Is a Prediction Market Combo?
A prediction market combo is when you combine multiple contracts to form an accumulative wager. This effectively multiplies the odds, meaning that if your wagers all settle as true, you get a better payout than you would if you’d simply bought a contract on each market.
They’re also called parlays at some prediction platforms. Kalshi calls them combos, but prediction market combos and parlays are the same thing - but they’re always different from sportsbook parlays.
Combos vs Parlays
Traditional sportsbook parlays involve choosing multiple markets and combining them into one wager. The sportsbook calculates new overall odds for you based on its assessment of the selection of wagers. It also places a “vig” or “take” on the wagers, which is how sportsbooks make their money. This is basically a cut of the overall odds. In parlays, the vig tends to be much higher than on single wagers, which is one reason sportsbooks are so keen to push parlays - whether you win or lose, they do very well from these bets.
At a glance, combos work in a similar way. The odds are multiplied, but unlike with sportsbook parlays, the odds are offered by other parties who “create” the market. As prediction markets use contracts for individual events, a new market needs to be created for a contract to be issued. So how does this work?
How Prediction Market Combos and Parlays Work
The mechanics behind combos are quite complicated, but don’t worry - we’ve broken it down below so you can use combos confidently.
The Request-for-Quote (RFQ) System
When you combine two or more contracts, it creates an RFQ or “request for quote.” This is sent to institutional market-makers. These institutions are registered with the prediction market platform as market-makers, which means they have enough resources to create liquidity for markets.
When these market-makers receive your RFQ, they respond with a proposal, e.g. if you want to combine two contracts at $0.50 and $0.40 respectively, you’d mathematically expect a quote of $0.20 (which is the two values multiplied together). However, your quote will likely be slightly higher than this (like around $0.22), depending on whether the market-makers perceive the contracts as closely related and any fees they might want to take.
You’ll be presented with the most favourable odds. The entire process usually takes a few seconds. Sounds simple, right?
Prediction Market Combo Fees
While you’re technically seeking a buyer, you’re not dealing with the institutional market-makers on a level field. They’re able to include fees and their own version of a vig to ensure the market is worth creating for them. For this reason, it’s not necessarily more advantageous to build a combo on a prediction market compared to a traditional sportsbook.
While prediction markets tend to be seen as more transparent than sportsbooks, this isn’t necessarily true when you’re sending RFQs to institutional market-makers. This is because these institutions can calculate probabilities on an industrial scale, using insights similar to the type sportsbooks use to work out odds.
Market Maker Spreads
The eventual odds you receive is called the spread. The best spreads tend to be on fairly uncomplicated combos of 2-3 contracts. The advantage over sportsbook parlays begins to fall off when you add 4 or more events, or when you combine several unrelated events - you may also not find a market maker for highly obscure combos. That said, sportsbooks tend to increase their take on higher parlays, so you’re always at a disadvantage when you add more cumulative wagers.
You can always work out how good a combo is by comparing the spread you’re offered to the mathematical spread. You can calculate the latter by multiplying the value of all contracts together and removing the dollar sign, e.g. 0.50*0.40*0.30 = 0.06. If the spread you’re offered is much higher than the mathematical spread, it’s probably not worth it - check out a sportsbook and see if you can get better odds there.
Are Prediction Market Combos Better Than Sportsbook Parlays? Verdict
Prediction market parlays can get you much better odds than sportsbooks in some cases, especially in small, closely related combos. However, sportsbooks have the advantage of offering more markets for combos, especially in sports betting. Remember, you can always compare multiple markets before you place a wager: rushing into a parlay is never a good strategy.
