Key idea
Your bankroll is money you could lose without touching rent, bills or savings. One unit is 1 to 2% of it. No single position gets more than 5%.
- Pick the number first, before you look at any market.
- Size every trade in units, so a losing week stays small.
- Use 1/4 Kelly only, and the 5% cap still wins.
- Full Kelly for a $1 contract = (your probability − price) ÷ (1 − price). We stake a quarter of it.
What counts as a bankroll
A bankroll is the money set aside for trading, and nothing else. The National Council on Problem Gambling puts the rule plainly: never gamble with funds meant for necessities like rent, bills or savings NCPG. Its toolkit adds two habits that fit trading too: budget it like entertainment, and always expect to lose it NCPG toolkit.
Keep it in one place. If you trade on Kalshi, the simplest version is to deposit your bankroll once and set a personal funding cap so a bad night can't pull in more Kalshi RT Hub. When the bankroll is gone, the month is done. You don't refill it from rent money. Lesson 04 covers how to hold that line.
What a unit is
A unit is a fixed slice of the bankroll. House convention We use 1 unit = 1 to 2% of bankroll. That range is our own rule, not an industry standard, and we say so every time we use it. It's small on purpose: it keeps a normal losing run survivable and makes every result on our record comparable.
A percentage rule assumes the bankroll changes slowly. A big win changes it in one step, which raises the unit by the size of the win without anyone deciding to. Resetting the bankroll after a big win covers setting the new figure first and applying the percentage to it second.
Here is what ten losses in a row do at different sizes, when each trade is a fixed share of whatever is left. This is arithmetic, not a forecast:
| Size per trade | Left after 10 straight losses | Drawdown |
|---|---|---|
| 1% (1 unit, low end) | 90.4% | −9.6% |
| 2% (1 unit, high end) | 81.7% | −18.3% |
| 5% (our ceiling) | 59.9% | −40.1% |
| 10% | 34.9% | −65.1% |
The 5% ceiling
No single position gets more than 5% of the bankroll, however good it looks. betstamp's guide says it directly: no sports bettor should risk more than 5% of their bankroll on any one bet betstamp. Two positions on the same game or the same fight count as one position for this rule.
Kelly, only as 1/4 Kelly
The Kelly criterion sizes a bet from your edge. For a Kalshi contract that pays $1, it works out to:
Full Kelly share = (your probability − price) ÷ (1 − price)
The catch is that your probability is an estimate. If it's too high, full Kelly overbets, and it can suggest wild sizes. betstamp's own example, a 60% chance at even money, gives 20% of the bankroll at full Kelly, which it calls far too aggressive betstamp. So we only teach 1/4 Kelly, and the 5% cap still applies on top. If the formula says zero or less, the right size is no trade.
Where does your probability come from? For a 15-minute window, what a 15-minute contract is worth shows the math, and why it is only an estimate.
How to size one trade
- Write down the bankroll: money you could lose without touching rent, bills or savings.
- Set one unit at 1 to 2% of it (our house convention).
- Write your own probability for the contract before you look at the price.
- Full Kelly share = (your probability − price) ÷ (1 − price). Stake a quarter of that.
- If a quarter Kelly is above 5% of the bankroll, stake 5%. If the formula gives zero or less, no trade.
Worked example
$1,000 bankroll, one 22¢ contract
The 30% is a made-up fair value for teaching, not a rating of any real fight. With your own number, run the calculator below.
Write the entry, the sell target and the hold rule before the event.
This lesson is education, not betting or financial advice. Only risk what you can afford to lose, and set a money limit before you start. Gambling problem? Call or text 1-800-MY-RESET, or chat at 1800myreset.org. Kalshi users can set funding caps and opt-outs in the Responsible Trading Hub.
Sources
- NCPG: responsible gambling guidelines (Super Bowl LX release)
- NCPG Responsible Play Toolkit
- betstamp: Kelly criterion. Source for the 5% ceiling and the 60% at even money example.
- Kalshi Help Center: Responsible Trading Hub
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