**Negative risk** is a mechanism for multi-outcome events where only one outcome can win. It enables capital-efficient trading by allowing positions across all outcomes within an event to be related through a **conversion** operation.
In a standard multi-outcome event, each market is independent. If you want to bet against one outcome, you must buy that outcome's No tokens—but those No tokens have no relationship to the other outcomes.
Negative risk changes this. In a neg risk event:
* A **No share** in any market can be converted into **1 Yes share in every other market**
* This conversion happens through the Neg Risk Adapter contract
### Example
Consider an event: "Who will win the 2024 Presidential Election?" with three outcomes:
| Outcome | Your Position |
| ------- | ------------- |
| Trump | — |
| Harris | — |
| Other | 1 No |
With negative risk, that 1 No on "Other" can be converted into:
| Outcome | After Conversion |
| ------- | ---------------- |
| Trump | 1 Yes |
| Harris | 1 Yes |
| Other | — |
This is capital-efficient because betting against one outcome is economically equivalent to betting *for* all other outcomes.
## Identifying Neg Risk Markets
The Gamma API includes a `negRisk` boolean on events and markets:
```json theme={null}
{
"id": "123",
"title": "Who will win the 2024 Presidential Election?",
"negRisk": true,
"markets": [...]
}
```
When placing orders on neg risk markets, you must specify this in your order options:
```typescript theme={null}
const response = await client.createAndPostOrder(
{
tokenID: "TOKEN_ID",
price: 0.5,
size: 100,
side: Side.BUY,
},
{
tickSize: "0.01",
negRisk: true, // Required for neg risk markets
},
);
```
## Contract Addresses
Neg risk markets use different contracts than standard markets:
See [Contract Addresses](/resources/contract-addresses) for the Neg Risk Adapter and Neg Risk CTF Exchange addresses.
Standard negative risk requires the complete set of outcomes to be known at market creation. But sometimes new outcomes emerge after trading begins (e.g., a new candidate enters a race).
The Gamma API includes a boolean field `negRisk` on events and markets, which indicates whether the event uses negative risk. For augmented neg risk events, an additional `enableNegRisk` field is also `true`. When placing orders, the SDK option is always `negRisk: true` / `neg_risk: True` regardless of whether the market is standard or augmented neg risk.
</Note>
## Technical Details
### Conversion Mechanics
The conversion operation is atomic and happens through the Neg Risk Adapter:
1. You hold 1 No token for Outcome A
2. Call the convert function on the adapter
3. You receive 1 Yes token for every other outcome in the event
