KALSHI Payout Basics: How Yes/No Contracts Settle
Kalshi payouts are the core of how binary event contracts convert prediction into USD cash. On Kalshi, every market has YES and NO sides, and each contract settles to $1.00 to the winning side if the resolution criterion is met. The price you pay for a YES or NO contract is a fraction of $1.00, and fees apply per trade. Understanding the payout framework helps you gauge edge opportunities and how settlements impact your position after a market closes.
What the Kalshi payout means in binary markets
In Kalshi binary markets, the payout is not a payoff of $1 before settlement. Instead, each contract costs a fractional price between $0.01 and $0.99 and settles at $1.00 if the outcome is true for YES or false for NO. If your YES contract resolves true, you receive $1.00 for that contract, minus any applicable fees. If it resolves false, the contract pays $0.00. The same applies to the NO side with the roles reversed. This structure defines the potential edge: buying both YES and NO when their best-ask prices sum to less than $1.00 locks in a risk-defined spread after settlement.
How settlement sources drive the payout
Kalshi settlements are determined by written resolution rules and designated sources, not by an external oracle. Each market lists a rule that specifies what evidence settles the contract, such as official tallies or data releases. The clearinghouse uses these sources to mark contracts to $1.00 for the winning side and $0.00 for the losing side. Knowing the resolution rule helps traders anticipate when a payout is realized and plan exits before or after settlement windows.
Fees and their effect on net payout
Kalshi charges a trading fee on each order, which reduces the effective payout from a raw $1.00. The fee scale is tied to price and size, peaking toward 50¢ per contract as prices approach $0.50. This means the nominal payout of $1.00 is reduced by the fee paid when entering or exiting a bet. When evaluating payout scenarios, include this cost to understand the actual edge you capture from intra-market arbitrage or endgame strategies.
Practical take: spotting payout-based edges
A practical edge on Kalshi arises when the best-ask YES plus best-ask NO prices sum to less than $1.00. In that case, buying both sides locks in a guaranteed cent-level spread, contingent on payout at settlement. Traders should also monitor bracketed or combinatorial markets, where multiple child contracts under one event ticker can enable similar payout captures. Always factor in fees, slippage, and potential settlement timing when assessing the profitability of an edge.
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FAQ
- What happens if a Kalshi market is delayed in settlement?
- Settlement timing can vary with market operations, but once the resolution is determined, payouts are settled to $1.00 for the winner and $0.00 for the loser. Fees still apply per contract.
- Do I need to hold both YES and NO to secure an edge?
- Not always. If the best-ask YES + NO prices sum to less than $1.00, buying both can lock in a small, risk-defined edge. If prices are already near $1.00, the opportunity may be limited.
- Are payouts guaranteed to be in USD?
- Yes. Kalshi payouts are settled in USD, and the platform operates under CFTC regulation as a DCM with fiat settlement.