Example -- 2020 POTUS market has 20 candidates. When a 21st candidate is added, what is the initial offering price and how is that price determined?
When Predictit adds another candidate, normal users on the site will determine the initial offering price and number of shares.
For example, if Candidate X gets created and I'm the first to buy shares for that option, the market would show the amount I spent per share, assuming there was a complimentary NO match.
For example, let's say I want to buy one YES share at $0.60. This means the site will look for a matching NO for $0.40.
Once the site makes this match, then the market is worth $0.60 on the Yes side, and $0.40 on the No side. This is what shows up as the market price for each respective side.
As users buy shares at varying prices, the market price changes with it. If another user comes along and buys 1 YES share at $0.59 (and thus another user buys 1 $0.41 NO share), the market fluctuates down to $0.59 for the YES side and $0.41 for the NO side.
Hope that makes sense.