How does Kalshi work? Contracts, prices, fees and payouts, with a worked example
What a Kalshi contract actually is
Every market on Kalshi is a question with a Yes answer and a No answer and a rule for deciding which was right: will the Federal Reserve cut rates at its next meeting, will a named team win a game, will the monthly inflation print land in a given range. Each contract on that question is worth exactly $1 at settlement to whichever side was correct and nothing to the other side. That fixed $1 is what makes the price readable as a probability. If Yes is trading at 40 cents, buyers are paying 40 cents for a chance at $1, and the implied probability is 40 percent. No on the same market trades at about 60 cents, because the two sides of one contract always add up to $1: Kalshi's help page on pricing puts it as "the combined investment of both users must equal $1."
This is the difference from a sportsbook. A sportsbook sets a price and takes the other side of your bet itself. On Kalshi, the other side is another member. A Yes buyer at 40 cents is matched with a No buyer at 60 cents, the $1 is held by the exchange, and at settlement it goes to whoever was right. Kalshi does not care which side wins; its revenue is the fee on the trade. For the mechanics of how a bookmaker's price differs from an exchange's, see our sportsbook versus prediction market comparison.
How the price is set: the order book, makers and takers
Prices are not published by Kalshi. They come from an order book, a list of what members are willing to pay (bids) and willing to accept (asks) at each cent from 1 to 99. When a bid and an ask meet, a trade happens at that price. If you place an order that matches an order already resting on the book, you are the taker; you get filled immediately and pay the taker fee. If you place an order at a price nobody is currently offering and it sits on the book until someone else matches it, you are the maker; you pay the lower maker fee, and only if the order actually executes. Cancelling a resting order costs nothing.
The gap between the best bid and the best ask is the spread, and it is a real cost that does not appear on any fee page: a market quoted 39 to 41 costs you a cent each way to enter and exit at the market. On popular contracts the spread is often one cent; on thin ones it can be ten or more. We measured this across venues in what the spread really costs. The price is also not fixed once you own the contract. You can sell your Yes contracts to someone else at the current price at any time before settlement, which is how traders take profits or cut losses without waiting for the event.
A worked example: $40 on Yes at 40 cents
Suppose a market asks whether an economic indicator will come in above a threshold, Yes is offered at 40 cents, and you buy 100 contracts at the market, taking liquidity. Here is every number, using the fee schedule in force since 7 July 2026.
| Step | Calculation | Amount |
|---|---|---|
| Cost of 100 Yes contracts at $0.40 | 100 × $0.40 | $40.00 |
| Taker fee on entry | 0.07 × 100 × 0.40 × 0.60 | $1.68 |
| Total outlay | $40.00 + $1.68 | $41.68 |
| Settles Yes: payout | 100 × $1.00 | $100.00 |
| Settles Yes: net profit | $100.00 − $41.68 | $58.32 |
| Settles No: net loss | $0 − $41.68 | −$41.68 |
| Sell early at $0.55 instead: proceeds | 100 × $0.55 | $55.00 |
| Taker fee on exit | 0.07 × 100 × 0.55 × 0.45, rounded up | $1.74 |
| Early exit: net profit | $55.00 − $1.74 − $41.68 | $11.58 |
Three things the table shows. First, the break-even probability is not 40 percent. You need the event to happen more often than 41.68 percent of the time to cover the fee, and more than that again if you pay a spread. Second, the fee is charged on the way out as well as the way in if you sell before settlement; holding to settlement costs nothing extra, because Kalshi charges no settlement fee. Third, the loss is capped at what you paid. There is no margin call on a standard event contract and no way to lose more than $41.68 on this position. (Kalshi's perpetual futures, a separate product, work differently and are not covered here.)
The fee formula, and why 50 cents costs the most
Kalshi's published fee schedule gives two formulas. For takers, the fee is 0.07 × C × P × (1 − P), where C is the number of contracts and P is the price in dollars; for makers it is 0.0175 × C × P × (1 − P). The result is rounded up to the next cent. Because P × (1 − P) is largest when P is 0.5, fees are highest on contracts priced near 50 cents and shrink toward the extremes: Kalshi's own examples are $1.75 on 100 contracts at 50 cents, $0.63 on 100 at 10 cents and $0.07 on 100 at 99 cents. Some market series carry a multiplier that changes the rate. Combination contracts (the KXMVE series, Kalshi's parlays) use a maker multiplier of 2, a handful of listed series charge no fee at all, and the default for most economic and sports markets is 1. The schedule is a dated document and Kalshi changes it; the version we used is effective 7 July 2026, and the live version at kalshi.com/fee-schedule governs. For a side-by-side with Polymarket's fee model, see Kalshi versus Polymarket fees.
| Fee type | Rate (effective 7 July 2026) |
|---|---|
| Taker (order matched immediately) | 0.07 × C × P × (1 − P), rounded up to the cent |
| Maker (resting order, when filled) | 0.0175 × C × P × (1 − P), rounded up to the cent |
| Settlement | None on simple Yes/No outcomes |
| Membership | None |
| ACH deposit and withdrawal | None |
| Debit card deposit | Up to 2% |
| Wire deposit | No Kalshi fee; bank fees vary; $1,000 minimum |
| Crypto | Third-party processor fees, shown before each transaction |
Deposits, withdrawals and who can sign up
To open an individual account you must be 18 or older and pass document verification if Kalshi asks for it; its help centre says you may be asked for an identification document and that the service is "accessible internationally" with some jurisdictions restricted under the member agreement. The 18 floor matters in the US, where most state sportsbooks require 21. The minimum deposit is $10, or $1,000 by wire. US members can fund by debit card (including Apple Pay and Google Pay), ACH bank transfer, PayPal, Venmo, Cash App, crypto or wire; international members are limited to debit card, crypto and wire. Deposits cannot be cancelled once submitted.
Withdrawals go back to the method you deposited with, once the deposit has processed and any security hold has ended; the hold length depends on the deposit method. Kalshi says debit withdrawals are "normally instant," subject to occasional extra verification by the payment processor, and that wire withdrawals are not supported below $500,000. ACH withdrawals carry no Kalshi fee. The practical reading is that card and bank rails are free or near-free, that your money is not locked once a market settles, and that a freshly deposited balance may have to wait out a hold before it can leave.
Settlement: how the $1 gets paid
When a market's outcome is determined, Kalshi's documentation says positions are "automatically resolved and funds transferred": Yes holders receive $1 per contract if the outcome is Yes, No holders receive $1 per contract if it is No, and only net positions settle. Markets "typically settle shortly after expiration," with timing that varies by market type, the availability of the data source and whether manual review is needed; an economic release with a published figure settles faster than a market that depends on an official announcement. Each market's rules page names the settlement source in advance, and reading it before trading is the single most useful habit on the platform, because edge cases (a postponed game, a revised statistic, an ambiguous announcement) are decided by that text, not by what seemed obvious. Some markets have a settlement floor that pays Yes holders part of the payout before final settlement.
Where Kalshi sits legally, briefly
Kalshi operates as a designated contract market under the CFTC, which is why it can list event contracts to US residents without a state gambling licence and why it argues that state gambling laws do not apply to it. That argument is being tested in court. As of October 2026 three federal appeals courts have ruled on whether a state can apply its gambling law to Kalshi's sports contracts, two against Kalshi and one for it, several states have cease-and-desist orders or injunctions in place, and a petition is pending at the Supreme Court. Non-sports markets have so far been outside the state fight. Where you are determines what you can trade: Kalshi geofences sports contracts in states where it has been ordered to. The current position by state is in our 50-state Kalshi legality tracker, which we update as orders are issued.
What this guide does not cover
This is a mechanics guide, not a review and not a strategy piece. It does not cover Kalshi's perpetual futures, which use margin and a separate fee table; its API; tax treatment of gains, which depends on your situation; or how to find mispriced contracts. Every figure above is from Kalshi's fee schedule effective 7 July 2026, its settlement documentation and its help centre as read in October 2026, and all of them can change; the live pages govern. We do not have a view on whether any contract is worth buying, and nothing here is legal, tax or financial advice.
Frequently asked questions
What does a Kalshi contract pay out?
Every Kalshi event contract settles at $1 if your side is correct and $0 if it is not. Your maximum loss on a bought contract is the price you paid plus the trading fee; your maximum gain is $1 minus the price, minus the fee.
How are Kalshi fees calculated?
Under the fee schedule effective 7 July 2026, the taker fee is 0.07 times the number of contracts times the price times one minus the price, rounded up to the next cent. The maker fee uses 0.0175 instead of 0.07. Fees peak at a 50-cent price and fall toward 1 cent and 99 cents. There is no settlement fee.
Who can open a Kalshi account?
Kalshi's help centre says an individual must be 18 or older and pass document verification if requested. The service is accessible internationally, with some jurisdictions restricted under the member agreement, and several US states have taken enforcement action over sports contracts, so availability depends on where you are.
How do deposits and withdrawals work on Kalshi?
The minimum deposit is $10, or $1,000 by wire. US users can fund by debit card, ACH bank transfer, PayPal, Venmo, Cash App, crypto or wire; ACH carries no fee and debit card deposits carry a fee of up to 2 percent. Withdrawals go back to the original method once the deposit has cleared any security hold, and debit withdrawals are normally instant.
Related
- Odds converter: turn a cent price into American odds and implied probability
- Is Kalshi legal in your state? The 50-state tracker
- Kalshi versus Polymarket fees
- What the spread really costs on prediction markets
- Sportsbook versus prediction market: how the two products differ
Sources
- Kalshi, Fee schedule, effective 7 July 2026, for the taker and maker formulas, rounding, worked fee examples, series multipliers, and deposit and withdrawal fees.
- Kalshi, Market settlement, developer documentation, for the $1 payout, netting, timing and settlement floors.
- Kalshi Help Center, How are prices determined?, for the probability reading of prices and the $1 pairing rule.
- Kalshi Help Center, Signing up as an individual, for the 18+ requirement and verification.
- Kalshi Help Center, Transfers FAQ, for deposit methods, the $10 and $1,000 minimums, holds and withdrawal timing.
- CFTC, Designated contract markets, for Kalshi's registration status.
18+ only. Prediction market contracts carry real financial risk and you can lose everything you pay for a position. This page explains mechanics; it is not legal, tax, financial or betting advice. If gambling stops being fun, help is available at 1-800-GAMBLER.