Kalshi
Definition
Kalshi is a U.S. exchange for event contracts operating under derivatives regulation; USD funding and classic order book.
Overview
Kalshi is the first CFTC-regulated exchange for trading on event outcomes, bringing prediction markets into the regulated financial system.
Key Features
- CFTC-regulated: Designated Contract Market (DCM)
- USD-based: Trade with US dollars, not cryptocurrency
- Legal for US traders: Fully compliant
- Order book: Traditional exchange mechanics
- Series structure: Recurring markets on same topics
How It Works
Getting Started
- Sign up: kalshi.com
- KYC verification: ID and address
- Fund account: Bank transfer, debit card
- Start trading: Buy/sell event contracts
Account Requirements
- Age: 18+ years old
- Location: US residents only
- Identity: Government ID required
- Bank account: For deposits/withdrawals
Market Structure
Events
Kalshi organizes markets by events:
- Single topic or theme
- Clear resolution criteria
- Official data sources
- Specific timeframes
Series
Recurring markets on same topic:
- Monthly series: "Will CPI exceed 3%?" (every month)
- Weekly series: Sports, weather
- Standardized: Same format, different dates
- Easy tracking: Follow series over time
Ticker Symbols
Each market has a unique ticker:
- Format:
SERIES-DATE-OUTCOME - Example:
INFL-24DEC-T3.00- INFL = Inflation series
- 24DEC = December 2024
- T3.00 = Threshold 3.00%
Market Categories
Economics
- Inflation (CPI, PCE)
- Fed rate decisions
- Employment data
- GDP growth
- Retail sales
Climate & Weather
- Temperature ranges
- Precipitation
- Extreme weather events
Politics & Policy
- Congressional votes
- Supreme Court decisions
- Regulatory actions
- (Note: Some political markets restricted)
Other
- COVID-19 metrics
- Technology adoption
- Cultural events
Trading Mechanics
Order Book
- Limit orders: Specify your price
- Market orders: Execute immediately
- Bid/ask spread: Like stocks
- Time in force: GTC, IOC, etc.
Fees
- Low fees: $0.01 - $0.07 per contract
- Tiered: Volume-based discounts
- Transparent: Listed on website
- No hidden costs: What you see is what you pay
Position Limits
- Maximum contracts per market
- Varies by market type
- Prevents market manipulation
- Compliance requirement
Regulation
CFTC Oversight
Kalshi operates as:
- Designated Contract Market (DCM)
- Regular audits and reporting
- Customer fund protection
- Market surveillance
Benefits of Regulation
- Legal certainty: Clear compliance
- Fund protection: Segregated accounts
- Dispute resolution: Formal processes
- Transparency: Required disclosures
Resolution
Data Sources
Markets resolve using:
- Government agencies: BLS, Federal Reserve, NOAA
- Official data: First published release
- Clear criteria: Specified in contract
- No ambiguity: Objective sources only
Timeline
- Event occurs (e.g., data released)
- Kalshi verifies source
- Market settles within hours
- Winnings credited to account
- Can withdraw or trade again
Funding
Deposits
- Bank transfer (ACH): Free, 1-3 days
- Wire transfer: Same day, may have fees
- Debit card: Instant, small fee
Withdrawals
- ACH: Free, 1-3 business days
- Wire: Fast, fees apply
- Minimum: Typically $10
Advantages
Regulated & Legal
- Safe for US traders
- No regulatory risk
- Institutional-grade infrastructure
USD-Based
- No crypto needed
- Familiar currency
- Bank integration
High-Quality Markets
- Curated selection
- Clear resolution criteria
- Professional operation
Limitations
US Only
- Must be US resident
- Identity verification required
- Cannot use from abroad
Limited Markets
- Fewer markets than global platforms
- Regulatory approval needed
- Focus on data-driven events
Position Limits
- Cannot take unlimited size
- Caps per market/series
- Prevents whale manipulation