What is Kalshi?

Kalshi is a U.S. prediction market and financial exchange where you trade event contracts—yes/no contracts on real-world outcomes such as inflation, Fed decisions, elections, weather, sports, and awards.

Founded in 2018 by Tarek Mansour and Luana Lopes Lara, Kalshi is based in New York City and launched to the public in 2021.

What makes Kalshi stand out is its regulatory status: in 2020 it became the first exchange dedicated to event contracts approved by the U.S. Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM).

That means Kalshi is regulated under the Commodity Exchange Act, similar in structure to futures exchanges—though the products look more like “bets” to many users.

How Kalshi’s event contracts work

Kalshi’s core product is a binary event contract:

  • Every market is phrased as a question:
    “Will year-over-year CPI in March be above 3.0%?”

  • You trade YES or NO contracts priced from $0.01 to $0.99, with a $1 notional value.

  • At settlement:

    • If the event happens, YES pays $1, NO pays $0

    • If it doesn’t, NO pays $1, YES pays $0

Contracts always come in pairs—one trader’s YES is matched with another’s NO—and the total value of a YES+NO pair is always $1.

Because of that structure:

  • A price of $0.63 for YES implies a 63% market-implied probability that the event will occur.

  • Your maximum profit on a YES at $0.63 is $0.37 (if it resolves YES).

  • Your maximum loss is your stake ($0.63 per contract).

Price discovery and order matching

Kalshi runs an order book similar to a stock or futures exchange:

  • When you buy YES, Kalshi matches you with a seller (or a buyer of NO) at the price you’re willing to trade.

  • Prices move as new orders come in, aggregating the crowd’s beliefs into a single number.

Yes—at the federal level.

  • The CFTC approved Kalshi as a Designated Contract Market, giving it authority to list event contracts under federal derivatives law.

  • In 2024–25, Kalshi fought the CFTC over whether it could list election markets on control of Congress; a federal judge vacated the CFTC’s rejection, and the D.C. Circuit later allowed Kalshi to resume offering U.S. election contracts.

However, state-level regulators don’t always agree:

  • States like Connecticut and Massachusetts have argued that Kalshi’s sports and some event markets are effectively unlicensed gambling, ordering the platform to stop operating for residents there.

So, Kalshi is CFTC-regulated nationwide, but your ability to use it can still depend on where you live and your local gaming laws.

What can you trade on Kalshi?

Kalshi lists a broad range of U.S.-centric prediction markets, including:

  • Economics & markets

    • Inflation (CPI, PCE) levels on specific release dates

    • Fed rate decisions

    • Unemployment and GDP figures

  • Politics and policy

    • Which party controls Congress

    • Passage or failure of major bills

    • Key election outcomes

  • Weather & climate

    • Rainfall or snowfall thresholds

    • Temperature records in specific cities

  • Sports & culture

    • Championship winners, season results

    • Award shows or other pop-culture milestones (where permitted)

This mix makes Kalshi attractive both to speculators and to people hedging real-world risks (for example, a business exposed to inflation hedging via CPI markets).

How to trade on Kalshi (simplified)

Always check local law and platform terms; this is an overview, not legal or investment advice.

  1. Sign up and verify
    Create an account at Kalshi.com and complete identity verification (KYC). As a regulated exchange, Kalshi must collect this information.

  2. Deposit funds
    Link a bank account or use supported payment methods to deposit U.S. dollars into your trading account.

  3. Choose a market
    Browse categories (economics, politics, etc.), pick a question, and carefully read the contract specs: event definition, data source (e.g., BLS for CPI), settlement date, and any edge cases.

  4. Pick YES or NO and a price

    • Decide whether you think the event will happen.

    • Enter how many contracts you want and choose a market or limit order.

  5. Hold or exit

    • You can sell contracts before expiration to lock in a profit or reduce a loss.

    • At settlement, the official data is released; the exchange determines the outcome according to the rules and your contracts pay $1 or $0 accordingly.

Fees, limits, and liquidity

Trading fees

Kalshi charges transaction fees based on the contract’s expected value, not a cut of your winnings:

  • Fees are applied when you buy contracts.

  • They are capped; documentation and third-party breakdowns suggest that even on a $100 trade the max fee is under $2, with lower fees for long shots or heavy favorites.

Position limits

Kalshi imposes per-contract limits (often in the tens of thousands of dollars or higher on some markets) to manage risk and comply with regulation.

Liquidity

Liquidity is supplied by:

  • Individual traders

  • Dedicated market makers such as Susquehanna International Group, which joined in 2024 to provide consistent order book depth.

Popular contracts (like election or headline CPI markets) can get very liquid, while niche contracts might be thin and require patient limit orders.

Key risks and what traders should know

Even though Kalshi is regulated, trading is risky:

  • Market risk: You can lose 100% of your stake on a given contract if you’re wrong about the outcome.

  • Legal and access risk: Some states treat certain contracts as illegal gambling; regulators in places like Connecticut have issued cease-and-desist orders.

  • Regulatory uncertainty: Courts are still hashing out how federal derivatives law and state gambling law interact, especially for sports and election markets.

  • Counterparty/operational risk: While Kalshi is fully regulated and cleared, no platform is immune to outages, data issues, or legal challenges.

Practical tips for new Kalshi traders

  1. Treat prices as probabilities
    Translate price to odds (e.g., $0.72 ≈ 72% chance) and ask whether the real probability is higher or lower.

  2. Know your niche
    Focus on areas where you actually follow data: macro releases, a specific sport, or election polling.

  3. Read the specs, not just the headline
    Settlement depends on the exact data source and rules in the contract—tiny wording details can decide who wins.

  4. Use limit orders in thin markets
    To avoid overpaying in less liquid contracts, place limit orders instead of sweeping the order book.

  5. Size modestly and respect leverage
    Event contracts are simple, but their all-or-nothing payouts make them highly leveraged on your beliefs. Start small.

Bottom line:
Kalshi is the first CFTC-regulated U.S. prediction market, turning opinions about inflation, elections, sports, and more into tradable event contracts. For traders who understand the rules, the regulations, and the risks, it offers a structured way to express views on the biggest questions driving markets and politics today.