Arbitrage
Binary Arbitrage
Exploiting a price gap where YES + NO best asks < $1.00 by buying both sides.
Detailed explanation
Binary arbitrage is an intra-market arbitrage play on Kalshi where the sum of the best-ask prices for YES and NO is below $1.00. By buying both sides, you lock in the spread (the difference to $1.00) as a nearly risk-free edge, minus the per-contract fee. The technique relies on the market ensuring the YES and NO prices converge toward $1.00 in fair value, so the combined cost of both legs gives you a guaranteed payoff on resolution.
In practice, you scan for markets where YES_ask + NO_ask < $1.00. If YES is priced at 42¢ and NO at 56¢, the total is 98¢. Purchasing one YES and one NO contract executes a guaranteed edge of 2¢ per pair, assuming no slippage and typical fees. This edge persists until the market moves or executes; effective execution depends on liquidity, fees, and timing relative to settlement.
Worked example
Example: For a Kalshi binary market, YES at 42¢ and NO at 56¢, total cost to buy both is 98¢. If the event resolves true, YES pays $1.00 and NO pays $0.00; if false, YES pays $0.00 and NO pays $1.00. In either case, you lock a 2¢ edge before fees, since you spent 98¢ and stand to gain $1.00 on the winning leg minus the other leg’s loss, netting a small guaranteed profit minus the Kalshi fee.
FAQ
- What is the core concept of binary arbitrage on Kalshi?
- Buy both YES and NO when their best asks sum to less than $1.00 to lock a guaranteed edge, minus fees, regardless of the event outcome.
- Why does the edge exist in intra-market arbitrage?
- Because market makers often price YES and NO separately; if their combined price dips below $1.00, a paired buy guarantees a payoff as the market converges toward $1.00 at settlement.
See Binary Arbitrage on a live Kalshi market
KalshiArb scans every open Kalshi market for arbitrage edges where YES + NO < $1.00. Plug in your Kalshi API key and start receiving alerts in under 5 minutes.
Related terms
- Intra-Market ArbitrageBuying both sides of a binary when the best-ask YES and NO sum to under $1.00 locks in a risk-defined edge.
- EdgeThe guaranteed profit margin when YES and NO prices sum to under $1.00 on a Kalshi binary.
- Guaranteed EdgeBuying both YES and NO when their bests sum to under $1 locks in a risk-defined profit (edge) at settlement.
- Risk-Free ArbitrageA named edge where buying both YES and NO across a Kalshi binary can lock profit if the best asks sum to less than $1.00 (not truly risk-free in practice).