Comment by dmurray

You should look into options - you're describing various forms of options contract.

None of them solve this problem, though:

> Now, of course, one can hope to sell your shares in “yes” or “no” 5 years from now, but there may not be enough liquidity?

In general, if there isn't liquidity in the primary market you should expect the derivative markets to be even worse. You would use options not to find extra liquidity - and binary options on illiquid markets like you describe are indeed particularly prone to market manipulation - but to express very particular views.

> another market M_2 that, maybe it resolves in 5 years as ‘yes’ if the price of M_1’s ‘yes’ is greater than 30%?

Like this one - you should buy this contract if you really do want to make a bet the price will be over 30%, and you don't care much about getting a big payday if the price is 90 or keeping most of your money if the price is 29.