Kalshi: The Comprehensive Guide to Event-Based Trading

Introduction: Kalshi’s Role in Modern Financial Markets

Kalshi has rapidly emerged as the leading event-based trading platform, transforming how individuals and institutions interact with real-world uncertainty. As the first and only federally regulated U.S. exchange for event contracts, Kalshi enables users to trade on the outcomes of events ranging from economic indicators and elections to sports, weather, and cultural phenomena. This guide provides an exhaustive overview of Kalshi’s business model, regulatory status, account management procedures, trading mechanics, contract structures, market categories, risk controls, fees, and practical strategies. It also compares Kalshi to its major competitors and explores advanced trading tools such as the Kalshi API.

Kalshi’s Business Model and Regulatory Foundation

Event Contracts: A New Asset Class

At the heart of Kalshi’s innovation is the event contract—a standardized, binary financial instrument that pays out based on the outcome of a specific, objectively verifiable event. Each contract revolves around a simple yes/no question, such as “Will the Fed raise rates in September?” or “Will Team X win the championship?” Traders buy “Yes” or “No” contracts, with prices ranging from $0.01 to $0.99, reflecting the market’s real-time probability estimate of the event occurring.

When the event resolves, winning contracts pay out $1, while losing contracts expire worthless. This structure makes contract pricing transparent and intuitive, allowing both retail and institutional traders to hedge, speculate, or express informed views on future events.

Regulatory Status: CFTC Oversight and Legal Clarity

Kalshi’s defining feature is its full regulatory approval by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO). This status distinguishes Kalshi from offshore or decentralized competitors, ensuring:

Legality and consumer protection for U.S. traders.
Transparent clearing and settlement via Kalshi Klear LLC.
Strict compliance with anti-money laundering (AML), know-your-customer (KYC), and recordkeeping requirements.
Federal preemption over state gambling laws, though some states continue to challenge sports-related contracts.

Kalshi’s regulatory journey included a landmark legal victory in 2024–2025, when federal courts affirmed its right to list contracts on political elections, cementing its legitimacy and triggering explosive growth in trading volume and market diversity.

Funding, Partnerships, and Global Expansion

By late 2025, Kalshi had raised over $550 million in venture funding, reaching a valuation of $5–11 billion after its Series D round. Major investors include Sequoia Capital, Andreessen Horowitz (a16z), Paradigm, and CapitalG. Strategic partnerships with Robinhood, Solana, and Zero Hash have expanded Kalshi’s reach, liquidity, and technical capabilities, including tokenized event contracts and on-chain settlement for crypto-native users.

Kalshi is now available in over 130 countries, with restrictions in approximately 38–50 jurisdictions due to U.S. and international sanctions or regulatory barriers.

Kalshi How to Get Started Opening an Account: Step-by-Step Guide

Eligibility Requirements

To open an account on Kalshi, applicants must meet the following criteria:

Age: At least 18 years old.
Residency: Legal U.S. residential address (all 50 states, D.C., U.S. territories) or eligible international jurisdiction.
Identification: Valid government-issued ID (driver’s license or passport) and Social Security Number (SSN) for U.S. residents. International users may need equivalent documentation.
Sanctions Compliance: Not subject to OFAC or other trade sanctions; not listed on the Specially Designated Nationals and Blocked Persons list.

Account Creation: Step-by-Step

Visit Kalshi’s Website: Navigate to the official Kalshi site and click “Sign Up.”
Provide Personal Information: Enter your full name, email address, phone number, and create a secure password.
Agree to Terms: Review and accept the Terms of Service, Privacy Policy, and Member Agreement.
Referral Code (Optional): Enter a referral code if available for potential bonuses.
Identity Verification: Upload a clear copy of your government-issued ID and provide your SSN. International users may need to submit equivalent documentation.
Residential Address: Enter your legal residential address (no P.O. boxes or commercial addresses).
Account Approval: Kalshi’s compliance team reviews your application, typically within 24–48 hours. You’ll receive an email notification upon approval or if additional information is required.
Deposit Funds: Once approved, log in and navigate to your wallet. Choose a deposit method (bank transfer, debit card, wire, crypto) and fund your account.
Start Trading: With funds available, explore markets and begin trading event contracts.

Table: Kalshi Account Opening Requirements

Requirement	Details
Age	18+ years
Residency	U.S. address or eligible international jurisdiction
ID	Driver’s license, passport, or equivalent
SSN	Required for U.S. residents
Sanctions	Must not be on OFAC or other restricted lists
Verification	KYC/AML checks
Approval Time	24–48 hours (typical)

Opening an account on Kalshi is a straightforward process, but accuracy and completeness are crucial to avoid delays. Kalshi’s compliance with CFTC and federal regulations means that all personal information is securely stored and used strictly for regulatory purposes.

Closing, Deactivating, or Reactivating a Kalshi Account

Closing or Deactivating an Account: Step-by-Step

Liquidate All Positions: Sell or close all active contracts in your portfolio.
Withdraw All Funds: Ensure your account balance is $0 by withdrawing all funds via your preferred method (ACH, wire, debit, crypto).
Initiate Deactivation: Once your balance is zero, visit the account deactivation page on Kalshi’s website.
Confirm Deactivation: Follow the prompts to confirm account deactivation. You’ll receive an email confirmation.

Important: Kalshi cannot delete account records due to regulatory requirements. All trading records are retained for compliance and security purposes, similar to other financial exchanges.

Reactivating an Account

Log In: Use your existing credentials to log back in.
Contact Support: If you encounter issues, reach out to Kalshi’s support team for assistance.

Deletion and Data Retention

Kalshi is legally required to retain account and trading records for regulatory audits and compliance. While you can deactivate your account and withdraw funds, full deletion is not possible. Your data is used strictly for regulatory purposes and is protected by robust security protocols.

Funding, Withdrawals, and Payment Methods

Deposit Options

Kalshi supports multiple funding methods, each with its own pros, cons, and processing times:

ACH Bank Transfer: No fees; $250–$15,000 range; 3–5 business days.
Debit Card (Apple Pay/Google Pay): Instant availability; 2% processing fee.
Wire Transfer: Fast for large sums; $1,000 minimum; no Kalshi fee, but bank fees may apply.
Crypto Transfer: Up to $500,000/day; processed via Zero Hash; fees vary by asset and network.

Table: Kalshi Deposit Methods

Method	Pros	Cons	Best For
ACH	No fees, secure	3–5 days processing	Most traders
Debit Card	Instant, easy	2% fee	Casual, fast funding
Wire	Large sums, fast	Bank fees, $1,000 min	Institutional, large
Crypto	High limits, fast	Network/processor fees	Crypto-native traders

Withdrawal Procedures

ACH Withdrawals: No fee; processed within 1–3 business days.
Debit Withdrawals: $2 fee; usually instant, but may require additional verification.
Wire Withdrawals: Only for transactions over $500,000; fees vary by bank.
Crypto Withdrawals: Fees disclosed prior to transaction; processed via Zero Hash.

Security Holds: Deposits via debit card are available for withdrawal after 3 days; bank transfers after 7–90 days depending on withdrawal destination. These holds protect against fraud and ensure transaction security.

Removing Connected Accounts

Users can remove linked bank accounts or debit cards via the Transfers tab in their Kalshi account dashboard.

Types of Trades and Contract Structures on Kalshi

Binary Event Contracts

The core trading instrument on Kalshi is the binary event contract, structured around a yes/no question. Each contract has two sides:

Yes Contract: Pays $1 if the event occurs.
No Contract: Pays $1 if the event does not occur.

Prices for each side range from $0.01 to $0.99, reflecting the market’s probability estimate. The sum of Yes and No prices typically approximates $1, with the difference representing the spread and market liquidity.

Scalar Contracts

Kalshi has begun experimenting with scalar contracts, which allow for multiple outcomes or payouts proportional to the event’s result. These are less common but may expand as the platform evolves.

Contract Specifications and Resolution

Each market has a detailed rulebook specifying:

Event definition and resolution criteria
Authoritative data source (e.g., BLS, NOAA, NCAA.com)
Settlement procedures
Position limits and collateral requirements

Resolution is based on objective, publicly verifiable sources to ensure transparency and minimize disputes.

Placing Trades on Kalshi: Step-by-Step Guide

Trading Mechanics

Kalshi operates a central limit order book, matching buyers and sellers in real time. Users can place two main types of orders:

Quick (Market) Order: Executes immediately at the best available price.
Limit Order: Specifies the maximum price to pay (or minimum price to accept), resting on the order book until matched.

Step-by-Step: Making a Trade

Log In: Access your account via the web or mobile app.
Browse Markets: Explore available event contracts by category (politics, economics, sports, etc.).
Select a Market: Review the market’s rulebook, resolution criteria, and current prices.
Choose Order Type:
- Quick Order: Enter the number of contracts and execute at the current price.
- Limit Order: Set your desired price and quantity; order will rest until matched.
Review Fees: Estimated fees are displayed before confirmation.
Confirm Trade: Submit your order; funds are debited to fully collateralize your position.
Monitor Portfolio: Track open positions, market price changes, and potential profit/loss.
Amend or Cancel Orders: Modify or cancel resting limit orders as needed.
Close Position: Sell contracts before resolution to lock in profits or cut losses, or hold until settlement.

Table: Kalshi Order Types

Order Type	Description	Fee Impact	Use Case
Quick Order	Immediate execution at market price	Taker fee applies	Fast entry/exit
Limit Order	Specify price; rests until matched	Maker fee or free	Price control, liquidity

Limit orders offer fee avoidance, precise price execution, and liquidity incentives, but may not always be filled if the market does not reach your specified price.

Fees, Spreads, and Maker/Taker Incentives

Trading Fees

Kalshi’s fee structure is designed to incentivize liquidity and active trading while maintaining transparency.

Taker Fees: Charged for orders that execute immediately against resting orders. Calculated as a variable percentage of expected earnings, typically under 2% per trade.
Maker Fees: Lower fees (or none) for limit orders that add liquidity and are later matched. The formula is quadratic, favoring trades far from 50¢ (long shots and near-certainties).
Fee Rebates: High-volume traders and market makers may receive rebates or incentives.

Table: Kalshi Fee Examples

Contract Price	Fee per 100 Contracts (Taker)	Fee per 100 Contracts (Maker)
$0.01	$0.07	$0.01
$0.50	$1.75	$0.44
$0.99	$0.07	$0.01

Fees are rounded up to the nearest cent, and small orders may pay a “round-up tax.” Excess rounding fees over $10/month are reimbursed.

Spreads and Liquidity

The spread is the difference between the highest bid and lowest ask. Narrow spreads indicate high liquidity, while wide spreads suggest lower demand or market uncertainty. Kalshi’s partnership with Susquehanna International Group (SIG) has dramatically increased liquidity, with 100,000-contract depth and spreads as tight as 2–3¢ in major markets.

Settlement and Membership Fees

No settlement fees.
No membership fees.
ACH deposits/withdrawals are free; debit card deposits incur a 2% fee; debit withdrawals cost $2.

Market Categories and Popular Event Types

Kalshi offers a diverse array of markets, including but not limited to:

Politics: Presidential, congressional, mayoral elections; legislative outcomes; government shutdowns.
Economics: Fed rate decisions; inflation (CPI); unemployment; GDP; S&P 500 and Nasdaq-100 indices.
Sports: NFL, MLB, NCAA championships; game outcomes; player awards.
Weather: Hurricane counts; temperature thresholds; precipitation events.
Crypto: Bitcoin, Ethereum price targets; ETF approvals; regulatory events.
Culture & Entertainment: Oscars, Grammys, Billboard rankings, TV viewership.
Tech & Science: Corporate launches, AI product releases, space missions.
Health: Public health events, vaccine approvals.

Each market is supported by a detailed rulebook specifying the resolution source and criteria, ensuring clarity and minimizing disputes.

Risk Management, Position Limits, and Collateralization

Position Limits

Standard accounts may hold up to $25,000 per market, with higher limits available for approved institutions and market makers. Position limits are calibrated to prevent market manipulation and excessive risk concentration.

Collateralization

All trades are fully collateralized at entry. Traders cannot lose more than their initial investment, and payouts are guaranteed by Kalshi’s clearinghouse. No leverage or margin trading is permitted, minimizing counterparty risk.

Risk Controls

Order rate limits prevent excessive messaging and potential system abuse.
Trading breaks and personalized funding caps are available for responsible risk management.
Emergency rules allow Kalshi to halt trading or modify contract terms in response to market disruptions or regulatory directives.

Order Lifecycle and Portfolio Management

Amending, Canceling, and Closing Orders

Amend Orders: Modify price or quantity of resting limit orders via the web interface or API.
Cancel Orders: Withdraw resting orders before execution.
Close Positions: Sell contracts before market resolution to realize profits or cut losses.

Portfolio Tracking

Kalshi’s dashboard provides real-time tracking of open positions, historical trades, profit/loss calculations, and tax documentation. Users can monitor market price changes and adjust positions dynamically.

Resolution Rules, Data Sources, and Dispute Handling

Resolution Procedures

Each market specifies an authoritative data source for outcome verification (e.g., BLS for CPI, NOAA for weather, NCAA.com for sports). Outcomes are posted on Kalshi’s website by 11:59 pm ET on the day of determination.

Dispute Handling

If a market outcome is disputed, Kalshi’s Outcome Review Committee—composed of independent directors—reviews the case and posts a final determination. Traders may request reviews or appeal decisions within specified timeframes.

Emergency Rules

In cases of market irregularities, technical failures, or regulatory interventions, Kalshi may halt trading, modify contract terms, or cancel contracts to protect market integrity.

Regulation, Legal Status, and Country Restrictions

U.S. Regulation

Kalshi operates under CFTC oversight as a DCM and DCO, with additional registration at the National Futures Association (NFA). Its contracts are classified as commodity derivatives, not gambling instruments, providing legal certainty for U.S. traders.

International Access

Kalshi is available in over 130 countries, but access is restricted in approximately 38–50 jurisdictions due to U.S. and international sanctions or regulatory barriers. Notable restricted countries include Canada, France, the UK, Russia, Singapore, Taiwan, and Venezuela.

State-Level Challenges

Some U.S. states continue to challenge Kalshi’s sports-related contracts, arguing they constitute unlicensed gambling. Federal courts have generally sided with Kalshi, citing federal preemption, but legal battles persist in states such as Maryland and Massachusetts.

Market Liquidity, Market Makers, and Trading Dynamics

Institutional Liquidity

Kalshi’s partnership with Susquehanna International Group (SIG) has revolutionized liquidity, enabling six-figure trades, 100,000-contract depth, and spreads as tight as 2–3¢ in major markets.

Market Maker Incentives

Market makers receive fee rebates, volume incentives, and priority access to new markets. Kalshi’s liquidity programs encourage deep order books and efficient price discovery.

Trading Dynamics

High-profile markets (e.g., elections, Fed decisions, NFL games) enjoy deep liquidity and rapid price movement, while niche markets may have wider spreads and lower volume. Kalshi’s order book structure allows active trading, scalping, and arbitrage strategies.

Using Kalshi API and Automation for Advanced Traders

API Access

Kalshi offers a robust API for programmatic trading, market data access, and portfolio management. Key features include:

REST API: Standard endpoints for market data, order management, and portfolio tracking.
WebSocket API: Real-time data streaming for live price updates and order book changes.
FIX Protocol: Institutional-grade integration for high-frequency trading.

Developer Tools

Sandbox Environment: Test trading strategies without risking real money.
Authentication: Secure API keys with periodic token refresh.
Rate Limits: Tiered access for different user types.

Automation Strategies

Advanced users can deploy algorithmic trading bots, backtest strategies using historical data, and build custom dashboards for portfolio analysis. Risk management features include position size limits, stop-loss mechanisms, and correlation analysis across event categories.

Taxes, Reporting, and Recordkeeping for Kalshi Traders

Tax Documentation

Kalshi provides IRS-compliant tax forms for users exceeding reporting thresholds:

1099-INT: Interest payments.
1099-MISC: Credit/rewards and net winnings.
1099-B: Transaction proceeds from brokered crypto transfers.

Tax Treatment

Prediction market earnings are treated as “other income” (not gambling winnings or capital gains) and reported on Schedule 1, Line 8z of IRS Form 1040.
Net profits (winnings minus losses) are taxable at ordinary income rates.
Quarterly estimated payments may be required for significant profits to avoid underpayment penalties.
Recordkeeping: Maintain detailed logs of contract names, buy/sell dates, amounts, settlement dates, and outcomes. Screenshots and transaction histories are recommended for audit protection.

State Tax Considerations

Some states may treat prediction market income differently; consult a tax professional for state-specific guidance.

Comparisons with Competitors: Polymarket, PredictIt, Augur

Kalshi vs. Polymarket

Feature	Kalshi	Polymarket
Regulatory Status	CFTC-regulated DCM/DCO	CFTC-regulated (US), DeFi (global)
Currency	USD (fiat)	USDC (crypto)
KYC/AML	Full verification	Minimal/off-chain (global)
Market Model	Central limit order book	Automated market maker (AMM)
Fees	0.07–7% taker; free/low maker	0–0.01% (US); 0% (global)
Liquidity	Deep (SIG, Robinhood)	High in crypto/politics
Accessibility	130+ countries (some restricted)	Global (DeFi restrictions)
API	REST, WebSocket, FIX	Web3 SDKs, on-chain
Market Coverage	Politics, economics, sports, etc.	Crypto, global events, culture

Kalshi offers superior regulatory protection, fiat integration, and liquidity for U.S. traders, while Polymarket excels in crypto-native markets, global access, and ultra-low fees.

PredictIt vs Augur vs Kalshi

PredictIt: Focused on U.S. political markets; operates under a research exception; lower position limits; less liquidity.
Augur: Decentralized, Ethereum-based; global access; low liquidity; complex user experience.

Kalshi’s regulated status, broad market coverage, and deep liquidity make it the preferred choice for serious event-based trading in the U.S. and compliant jurisdictions.

Practical Trading Strategies and Examples for Kalshi Users

Specialization and Edge

Focus on markets where you have domain expertise (e.g., economics, politics, weather) to gain an informational edge. Specialization reduces noise and improves decision quality.

News-Driven Trading

React quickly to breaking news and scheduled catalysts (e.g., CPI releases, Fed meetings) to capitalize on market repricing. Use external data sources and Kalshi’s news feed for timely insights.

Arbitrage and Cross-Platform Comparison

Identify price discrepancies between Kalshi and competitors (e.g., Polymarket) for arbitrage opportunities. Be aware of resolution rule differences to avoid total loss in case of divergent outcomes.

Risk Management

Cap exposure to a fixed percentage of your account per position.
Hedge correlated markets (e.g., buy YES in one, NO in another).
Avoid emotional trading and revenge trades.
Use historical data and backtesting to inform probability estimates.

Portfolio Management

Treat your Kalshi account as a portfolio, tracking open positions, historical trades, and profit/loss. Adjust positions dynamically based on market sentiment and new information.

Advanced Tools

Leverage Kalshi’s API for algorithmic trading, real-time data analysis, and automated risk controls. Build custom dashboards and trading bots for enhanced performance.

Conclusion: Kalshi’s Impact and Future Outlook

Kalshi has redefined event-based trading by merging financial innovation with regulatory rigor. Its binary event contracts, deep liquidity, transparent fee structure, and robust compliance framework make it the premier platform for trading on real-world outcomes. Whether you are a retail trader seeking to profit from your insights or an institution hedging portfolio risk, Kalshi offers a secure, efficient, and versatile environment.

As prediction markets continue to gain mainstream acceptance, Kalshi’s expansion into global markets, partnerships with major financial institutions, and integration with blockchain infrastructure position it at the forefront of financial innovation. The platform’s commitment to transparency, security, and user empowerment ensures that event-based trading will remain a vital tool for forecasting, hedging, and capitalizing on the future.

Kalshi How to Get Started Guide