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p + f/C.This guide uses a YES purchase held until the contract resolves. The same equations work for NO when p is the executed NO price and q is your estimated probability that NO settles as correct.
nominal implied probability = contract priceA transaction at $0.43 maps to a nominal 43% implied probability for that side. If the interface quotes cents, the conversion is even simpler: 43 cents maps to 43%. Kalshi explains this relationship as a convenient way to read event-contract prices.
The word implied matters. A market price is created by compatible buyers and sellers; it can move, reflect limited liquidity, or turn out to be badly calibrated. Even a well-calibrated 70% forecast should be wrong about three times in ten across a large comparable set. One result cannot prove that a probability was correct or incorrect.
Suppose the current YES book is 42-cent bid and 44-cent ask:
A new immediate buyer should start the math at 44%, before fees. A seller who crosses the book starts from 42%. The 43-cent midpoint is not executable unless a compatible order appears there. A “last price” can be even less useful when the book has changed since that transaction.
Quantity matters too. If only 20 contracts are offered at 44 cents and the next 80 are at 46 cents, a 100-contract immediate purchase would average 45.6 cents before fees. Walk the visible levels with the slippage calculator and then verify the live order estimate.
Each correct contract settles at $1; an incorrect contract settles at $0. For C YES contracts purchased at p and held to resolution:
| Quantity | Formula | Meaning |
|---|---|---|
| Trade cost before fee | C × p | Cash paid for the contracts |
| Total modeled cash outlay | C × p + f | Contract cost plus entry fee |
| Settlement payout if YES | C × $1 | Total settlement value, not profit |
| Net profit if YES | C × (1 − p) − f | Payout less trade cost and entry fee |
| Net result if NO | −C × p − f | The modeled cash outlay is lost |
Example without fees: 100 YES contracts at 40 cents cost $40. A YES resolution pays $100, so gross profit is $60. A NO resolution pays $0, so the loss is $40. The $100 is payout; calling it $100 of profit would be wrong.
The probability that makes the expected net result equal to zero is:
break-even q = p + f/CFor 100 contracts at 40 cents with a purely illustrative $2 total entry fee, break-even is 0.40 + $2/100 = 0.42, or 42%. The $2 is a math input, not a quote of Kalshi's fee. The actual fee can depend on price, quantity, product and maker/taker treatment; consult the current schedule and order ticket.
This simplified formula assumes the contracts are held to resolution, so there is no separate exit trade in the model. If you plan to sell before resolution, include the expected exit price, expected exit fee and slippage. Our payout calculator exposes price, quantity and fee inputs instead of hiding those assumptions.
If q is your estimated probability that YES resolves correctly, the expected net result for a hold-to-resolution purchase is:
EV = C × (q − p) − fThe derivation is the probability-weighted average of the two possible net results:
EV = q[C(1 − p) − f] + (1 − q)[−Cp − f]Using 100 contracts, a 40-cent execution price, the same illustrative $2 entry fee and a personal estimate q = 55%:
100 × (1 − 0.40) − 2 = +$58−100 × 0.40 − 2 = −$420.55 × $58 + 0.45 × (−$42) = +$13That is a model output, not a promise. The arithmetic can be exact while q is wrong. Selection bias, correlated trades, rule interpretation, changing information, insufficient sample size and a wide spread can all make a backtested or subjective “edge” disappear.
Kalshi matches complementary positions: at a transaction price p for YES, the matched NO side contributes 1 − p, so the pair totals $1. That does not mean the separately displayed YES ask and NO ask must total $1.
Each ask is an offer to buy that side immediately. If the best YES bid is 42 cents, the economically equivalent best NO ask is 58 cents. If the best YES ask is 44 cents, the equivalent best NO bid is 56 cents. Buying YES at 44 and also buying NO at 58 crosses both sides of a two-cent spread, totaling $1.02 before fees.
The visual order-book guide shows this complement mapping and explains depth, price-time priority and weighted-average fills.
At a 25-cent price before fees, one correct contract returns $1, including the 25-cent cost. The gross profit is 75 cents. The gross profit-to-cost ratio is therefore 0.75/0.25 = 3, often described as 3-to-1 reward relative to the amount at risk. The nominal break-even probability is 25%, not 75%.
gross profit-to-cost ratio = (1 − p) / pLarge potential multiples occur precisely because the priced outcome is less likely. A low price is not automatically cheap, and a high payout multiple is not automatically attractive.
The order-types guide covers Quick, Limit, GTC, IOC and FOK behavior. The fee guide explains why price and maker/taker status affect transaction cost.
A 70-cent transaction price is commonly read as a 70% market-implied probability for that side of the contract. It is a market price, not a guarantee or a verified true probability. A new buyer should use the current executable ask and include fees.
When a binary contract is quoted in dollars from 0 to 1, nominal implied probability equals the price. A price of 0.43 maps to 43%. When the interface shows cents, the number of cents maps directly to the percentage.
No. The midpoint is a reference between the best bid and ask. Neither side may be executable at the midpoint, and the price can still be a poor probability forecast. Use the ask for a planned purchase and the bid for a planned sale.
For C YES contracts bought at p dollars each and held to resolution, with f dollars of total entry fees, the simplified break-even estimate is p + f/C. This assumes no exit transaction and should use the fee shown for the actual order.
For C contracts bought at p dollars, a personal YES probability q and total entry fee f, expected net value when held to resolution is C × (q − p) − f. A positive estimate depends entirely on q being well calibrated and does not guarantee profit.
The two asks are offers from different sides of the spread. A matched YES and NO pair is complementary and totals one dollar, but buying each side at its separate ask crosses both spreads, so the displayed asks can total more than one dollar.