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Trade Smart path · Lesson 03 of 05

Reading prices and fees

Every Kalshi price is a probability in disguise. Learn to read it, then learn what the spread and the fee take before you've been right about anything.

5minutes Tool: price and fee calculator 3-question quiz Not finished yet

Key idea

A price in cents reads as a chance in percent. 22¢ is roughly 22%. Your edge is the gap between that and your own estimate, after the spread and the fee.

  • A YES contract pays $1 if it happens and $0 if it doesn't.
  • You buy at the ask and sell at the bid. The gap costs you both ways.
  • High prices pay little. An 85¢ contract can only make 15¢, before fees.

Cents are chances

Every Kalshi contract settles at $1 or $0. So if YES costs 22¢, the market as a whole is pricing that outcome at about a 22% chance. It's "about" because the spread and the fee sit on top. Sportsbook odds say the same thing in a different format: +319 works out to 100 ÷ (319 + 100) = 23.9%.

The price is the market's number, not yours. You only have a trade when your own fair value, written down first, is higher than what you pay.

Bid, ask and the spread

  • Bid: the best price a buyer will pay right now. It's what you get if you sell immediately.
  • Ask: the best price a seller will take right now. It's what you pay if you buy immediately.
  • Spread: ask minus bid. With a 21¢ bid and a 23¢ ask, buying and selling straight back loses 2¢ a contract before either fee.

How the fee works

Kalshi's taker fee is 0.07 × contracts × price × (1 − price), rounded up to the next cent for each order Kalshi fee schedule. It's largest at 50¢ (1.75¢ a contract) and shrinks toward the edges. Resting orders can pay less on some markets, so we estimate with the taker formula to stay on the safe side. For 100 contracts at 22¢ the fee is $1.21, which moves your break-even chance from 22% to 23.21%.

Worked example

An 85¢ contract only makes 15¢

100 contracts
Buy 100 YES at 85¢$85.00The market prices it near an 85% chance
Fee$0.900.07 × 100 × 0.85 × 0.15 = $0.8925, rounded up
If YES: settles at $1+$14.10$100.00 − $85.90
If NO: settles at $0−$85.90The whole cost
Right 6 times out of 7−$1.306 × $14.10 − $85.90. You need to be right 85.9% of the time just to break even.

Same point as TheLines' guide to Kalshi's short markets TheLines: a high price looks safe, but one miss erases many small wins.

Tool

Price and fee calculator

Turn any price into a chance, then see the fee, the payout and what the spread costs.

Implied chance–
Break-even chance–
Fee on this order–
Total cost–
Most you can make–
Profit per $1–
Spread–
Fee for 100 contracts at each price, same formula. Fee share = fee ÷ the most you could make.
PriceCostFeeMost you can makeFee share

Fee estimate: Kalshi's taker formula, rounded up per order. Resting orders can pay less. Check the current fee schedule. Nothing you type is saved or sent.

Check yourself

Three questions

Finishing marks lesson 03 done and counts toward your learning streak.

YES trades at 22¢. Roughly what chance is the market giving it?
You buy 100 YES at 85¢ and pay a $0.90 fee. What is the most you can make?
The bid is 21¢ and the ask is 23¢. You buy and immediately sell. What happens?

Next · Lesson 04 of 05 · 5 minTilt and loss limits

Money limits beat time limits. Set yours while nothing is at stake.

21+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-GAMBLER, or call, text or chat 1-800-MY-RESET (1800myreset.org). Kalshi users can set funding caps and opt-outs in the Responsible Trading Hub.

Sources

  1. Kalshi fee schedule. Taker fee 0.07 × C × P × (1 − P), rounded up.
  2. TheLines: Kalshi 15-minute markets

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