Arbitrage
Risk-Free Arbitrage
A 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).
Detailed explanation
Risk-free arbitrage is the idea of locking in a risk-defined edge by purchasing both sides of a binary Kalshi market when the best-ask prices on YES and NO sum to under $1.00. If you can buy YES and NO for a combined price below $1, you can hold until settlement and capture the guaranteed spread, minus Kalshi’s per-contract fees. In practice, this is not perfectly risk-free due to settlement timing, fees, potential slippage, and market-change risks, but it represents a near-riskless opportunity given current quotes. This edge hinges on the pricing mechanics of Kalshi’s binary contracts and the requirement that the pair’s summed price remains below $1 at the time of execution. KalshiArb focuses on identifying and exploiting these intra-market opportunities within the platform’s USD-settled, CFTC-regulated framework.
Worked example
If YES is priced at 42¢ and NO at 56¢, the pair costs 98¢ total. You buy both legs for $0.98. If the market settles true for YES or NO, one side pays $1.00 and the other pays $0.00, yielding a gross edge of 2¢ per contract before fees. After fees (and any subsequent minor slippage), you still lock a small positive edge per completed pair.
FAQ
- Is risk-free arbitrage truly risk-free?
- No. While the strategy can lock in a spread when the combined price is under $1, real-world factors like fees, timing, and settlement risk can erode profits.
- What market condition enables this edge?
- The edge exists whenever the best YES ask plus the best NO ask is less than $1.00, allowing a complete set of child contracts to be bought at a guaranteed cheap total.
- Does Kalshi charge fees that affect the edge?
- Yes. Kalshi applies a per-contract fee on trades, which reduces the net edge from the gross $1.00 settlement payoff.
See Risk-Free 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.
- Binary ArbitrageExploiting a price gap where YES + NO best asks < $1.00 by buying both sides.
- 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.