Last month I fat-fingered a market order on a Fed decision contract and got filled 4 cents worse than the bid I was staring at. Four cents doesn't sound like much until you multiply it by 500 contracts. That mistake cost me more than my morning coffee budget for the year. Order types matter. They're not just dropdown menus to click through.
If you came from stocks or crypto, you probably defaulted to market orders for years. Liquidity was deep enough that slippage rarely hurt. Prediction markets are different. Kalshi's order books can be thin, especially on niche contracts or during quiet hours. The spread between best bid and best ask might be 5, 8, even 15 cents on a contract priced in the 40s.
Understanding Kalshi order types explained in practical terms will save you money. I'm not exaggerating. The difference between a sloppy entry and a clean one can eat your entire edge on a trade.
Kalshi is CFTC-regulated, which means the order matching and execution are legit. But regulation doesn't protect you from yourself. You still need to know what buttons you're pressing.
A limit order lets you specify the exact price you're willing to pay (if buying) or accept (if selling). The order sits on the book until someone matches it, you cancel it, or the market expires.
Here's what makes limit orders essential:
The downside? No guarantee of execution. If the market moves away from your price, your order just sits there. I've watched contracts rip 10 cents in my favor while my limit order collected dust one tick below where action was happening.
Use limits when you're not in a rush. Pre-event positioning on something like a Fed decision (KXFEDDECISION contracts) is a good example. You know the event date, you have time to get filled, and you'd rather wait for a good price than chase.
I use limit orders on probably 80% of my trades. The other 20% are situations where I need to get in or out immediately.
A market order executes immediately at the best available price. You're crossing the spread, taking whatever's sitting on the other side of the book.
The advantage is obvious: certainty of execution. If you need to be in a position right now (breaking news, surprise data release, you name it), a market order gets you there.
The risks are equally obvious:
I use market orders when news breaks and I have strong conviction. If a major outlet reports something that I believe will move a contract 15+ cents, I'm not waiting around for a limit fill. Speed matters more than 2 cents of slippage.
The key is sizing appropriately. If you're going to market order, check the depth first. Kalshi shows you the order book. Look at it.
IOC stands for Immediate Or Cancel. This order type tries to fill immediately at your specified limit price (or better). Whatever portion doesn't fill gets canceled automatically. No resting order left behind.
Think of IOC as a limit order that refuses to wait. You're saying: "I'll pay up to X, but only if I can get filled right now."
This is useful in a few scenarios:
The practical difference is what happens to unfilled portions. Regular limits rest on the book. IOC orders vanish. If you want a full position or nothing, IOC might frustrate you with partials. But if you're fine scaling in, it's a useful tool.
I use IOC when I'm trading around events and want to grab liquidity without leaving stale orders. On something like an election night contract (KXPRESPARTY for example), prices move fast. I don't want orders sitting around getting picked off.
Here's what I've learned from a couple years of trading these markets:
If you want to discuss setups and order flow with other traders, I share some of my thinking in the Telegram channel I run. No promises, just real talk about what I'm watching.
I've made all of these. You probably will too, but maybe this saves you one or two:
Limit orders. They give you price control and prevent the worst slippage mistakes. You might miss some trades, but you won't get filled at prices you didn't want. Start with limits, learn to read the order book, and only graduate to market orders when you understand why speed matters more than price in specific situations.
Yes. You can cancel and replace orders before they fill. Kalshi's interface lets you view open orders and cancel them. I do this constantly, adjusting limit prices as markets move. Just remember that during fast-moving events, your cancel might not process before a fill happens.
No. IOC orders fill whatever quantity is available at your price or better, then cancel the rest. If you want 100 contracts and only 30 are available, you get 30. The remaining 70 are canceled. This is by design. If you need a full position, you'll have to monitor and potentially send additional orders.
The mechanics are similar but the context differs. Stock markets have massive liquidity and tight spreads on major names. Kalshi's prediction markets can be thinner, especially on niche events. This makes order type selection more consequential. The same limit order habits from equities apply, but slippage on market orders can be more severe.
Not financial advice. I trade my own money and you can lose yours. Do your own research.