Prediction markets have a well-documented favourite-longshot bias. What is less understood is how narrative framing shifts volume independently of true probability — especially in political markets where story beats statistics.

We analysed 847 markets across politics, economics, and culture categories over a 12-week window ending 1 November 2024. Volume, not resolution outcome, was the primary metric.

The most striking finding: markets priced between 55% and 70% generated more trading activity than markets above 85%, even when the underlying event profile was similar. This held across all three categories, but was strongest in the political markets resolved this quarter — where 62% of top-quartile volume movers sat in the 60–70% band.

The 65 percent paradox

Conventional wisdom suggests traders gravitate toward certainty. Our data shows the opposite for high-engagement markets: the 60–70% consensus band acts as a "narrative sweet spot" where both sides believe they have edge.

Underdog framing — headlines emphasising surprise outcomes, challenger momentum, or "overlooked" signals — correlates with a 34% volume lift in this band compared to identically structured markets without that framing.

What this means for traders

If you are building a position in a market above 90%, expect thinner liquidity and slower price discovery. The actionable zone for volume-driven strategies remains the 55–75% band, particularly when media coverage uses competitive or upset language.

For market makers, this implies wider spreads are not just a function of uncertainty — they reflect asymmetric narrative interest that standard pricing models do not capture.