Basics · lesson 13 of 15
How does Kalshi work? Contracts, prices, settlement and sign-up
Kalshi is a CFTC-regulated exchange where you buy and sell yes-or-no contracts on events. Each contract pays $1 if its side is right and nothing if not, so its price in cents reads as a probability. Kalshi says you always trade with other members, not the exchange, and it earns a fee per trade.
In one minute
- Every market is a question with a YES and a NO contract; together they are worth $1.
- Prices run from about 1¢ to 99¢ and move with supply and demand on an order book.
- You can sell before the result, or hold to settlement: $1 per winning contract, $0 per losing one.
- Kalshi earns a trading fee and says you always trade against another member, not the exchange.
Who runs Kalshi
Kalshi is operated by KalshiEX LLC, which the CFTC designated as a contract market in November 2020 (CFTC release 8302-20). That makes it a federally regulated exchange for event contracts, not a sportsbook. Several states dispute that its sports contracts are outside their gambling laws; see Kalshi lawsuits.
Contracts and prices
Each market asks a question, such as whether a temperature or an inflation figure will be above a level. If YES trades at 70¢, NO trades around 30¢: in Kalshi’s words, “the combined value of all Yes and No contracts for a given market always equals $1”. A 70¢ price means traders put the chance at about 70%. “You are always trading against another member of the platform, not the exchange itself.” Orders that don’t fill at once rest on the order book; how bids and asks work is in bid vs ask.
How markets settle
Each market’s rules name the information and source that decide its outcome. Kalshi says most markets settle “within a few hours after the outcome is known”, often within about three. Winning contracts pay $1 each into your balance; losing ones expire at $0. You don’t have to wait: you can sell a position at the current bid at any time while the market is open.
Signing up and funding
- You must be 18 or older and verify your identity with a driver’s licence or passport.
- Deposits: debit card (including Apple Pay and Google Pay), bank transfer, PayPal, Venmo, Cash App, crypto or wire. Debit card deposits may carry a 2% fee; bank deposits are free. The minimum is $10, or $1,000 by wire (transfers FAQ).
- Markets cover economics, financials, crypto, weather, politics, elections, sports, entertainment, companies and more.
- Fees: a trading fee on the expected earnings of each contract, highest at 50¢; the formula is in Kalshi fees.
Whether Kalshi’s sports contracts are available where you live depends on state court orders; check availability by state. To practise first, use Kalshi’s demo. The full picture: Kalshi review.
See it live on Kalshi
CFTC-regulated event contract exchange
Common questions
How does Kalshi work?+
You buy YES or NO contracts on an event. Each pays $1 if it is right and $0 if not, so prices from 1¢ to 99¢ read as probabilities. You trade with other members on an order book, and Kalshi charges a fee per trade.
Is Kalshi gambling or trading?+
Federally, Kalshi is a CFTC-regulated exchange and its contracts are derivatives. Several states argue its sports contracts are gambling under state law, and courts have split on it.
Who do you bet against on Kalshi?+
Other members. Kalshi says you are always trading against another member, not the exchange; Kalshi earns money from trading fees.
How long does Kalshi take to pay out?+
Most markets settle within a few hours of the outcome being known, often within about three, and winning contracts pay $1 each into your balance.