Kalshi Fees Explained: What a Contract Really Costs in Prediction Markets

Prediction markets like Kalshi have surged in popularity, offering traders a way to buy and sell "Yes" or "No" contracts on real-world events. But while the bid/ask prices are clear, the true cost of trading on Kalshi involves a set of nuanced fees that can significantly impact your net outcomes—especially when compared across platforms or with sportsbooks. In this article, we'll break down how Kalshi's fees work, walk through detailed examples, and show how these numbers matter in finding real arbitrage opportunities or simply understanding your breakeven.

Kalshi’s Fee Structure: The Essentials

Kalshi's fees come in two main forms:

1. Trading Fee: 0.7% of the notional value of contracts bought or sold, per side, with a minimum of $0.01 per trade.
2. Settlement (Event) Fee: 0.7% of the amount you receive when a contract resolves in your favor, also with a $0.01 minimum.

Let's unpack these terms before diving into examples:

• Notional Value: For a Yes/No contract trading at, say, $0.40, notional value is the number of contracts times $1 (the contract payout if correct). So buying 10 contracts at $0.40 means $10 notional, even though you only pay $4.
• Per Side: Both opening and closing a position incur a fee, unless you simply hold to settlement.
• Minimum Fees: Tiny trades may be disproportionately expensive due to the $0.01 floor per transaction.

Worked Example 1: Buying and Holding to Settlement

Suppose you buy 100 "Yes" contracts on a Kalshi event at $0.40 each. The event resolves in your favor (“Yes” is correct). What are your total costs?

• Buy 100 contracts at $0.40 = $40 outlay
• Trading Fee: 0.7% of $100 (notional value) = $0.70 (meets $0.01 minimum)
• Settlement Fee: 0.7% of $100 = $0.70 (meets $0.01 minimum)
• Total Fees: $0.70 (trade) + $0.70 (settlement) = $1.40

Payout: 100 contracts * $1 = $100

Net Profit Calculation:

• Receive: $100 (settlement)
• Less: $40 (initial cost) + $1.40 (fees)
• Net: $100 - $40 - $1.40 = $58.60

Effective Net Price Paid per Contract:

• Total spent: $40 (purchase) + $1.40 (fees) = $41.40
• For $100 payout → $41.40 / $100 = $0.414 per contract

So, a price of $0.40 per contract is really $0.414 after all fees, a 1.4% increase.

Worked Example 2: Trading Out Before Settlement

Suppose instead you buy 100 contracts at $0.40, then later sell them at $0.50 before the event settles.

• Opening Buy: 0.7% of $100 = $0.70
• Sell: 0.7% of $100 = $0.70
• No settlement fee, since you exited before resolution.

Buy cost: 100 x $0.40 = $40 Trading fee (buy): $0.70 Sell proceeds: 100 x $0.50 = $50 Trading fee (sell): $0.70

Net:

• Money in: $50 (sell) - $0.70 (sell fee) = $49.30
• Money out: $40 (buy) + $0.70 (buy fee) = $40.70
• Net profit: $49.30 - $40.70 = $8.60

Raw price gain: $0.10 per contract × 100 = $10 Total fees: $1.40 Net gain per contract: $8.60 / 100 = $0.086

Takeaway: The round-trip fee for opening and closing before settlement is 1.4% of notional ($1.40 on $100 notional, or $0.014 per contract).

Worked Example 3: Small Trade, Minimum Fee Impact

Say you buy just 1 contract at $0.40.

• Trading fee: Max(0.7% x $1, $0.01) = $0.01
• Settlement fee (if held): $0.01

Total fees: $0.02 vs. $0.014 for a $10 notional (from prior example). For tiny trades, the $0.01 minimum can make effective fees much higher. ($0.02 on $0.40 is 5%!)

The Math: Effective Spread and Price Conversion

For traders comparing Kalshi with sportsbooks or other prediction markets, the key is to "fee-adjust" the prices. Here’s how:

• If buying and holding: Add 1.4% to the price you see.
  • Example: $0.60 becomes $0.6084
• If flipping (buy and sell): Add 1.4% spread to the round-trip
• For small trades: Calculate using the $0.01 minimums

This is important when searching for arbitrage between Kalshi and other venues. If you see a $0.60 "Yes" on Kalshi and a sportsbook is offering +100 (i.e., even money) on the same binary event, the Kalshi price is actually $0.6084 net, and there’s no arb unless the sportsbook is offering +110 or better.

How Does This Compare to Polymarket and Sportsbooks?

• Polymarket: Charges a 2% settlement fee (no trading fee), so if you buy/sell before settlement, it's cheaper; if you hold to settlement, it's higher than Kalshi.
• Sportsbooks: Typically, the spread is hidden in the odds (e.g., both sides at -110), but there are no explicit fees per trade; the edge is in the pricing.

Why Fees Matter for Arbitrage

When seeking arbitrage between Kalshi, Polymarket, and sportsbooks, the actual net price is what counts. This is where automated tools like ArbMonster provide value: they scan live prices across 20+ sportsbooks, Kalshi, and Polymarket, with all fees included, so you see the true, fillable-size arbitrage gaps without doing the math every time. For a deeper dive into how fee-adjusted arbitrage math works, check out ArbMonster's Learn section.

Quick Reference Table: Kalshi Fees

Action	Fee
Buy/Sell	0.7% of notional (min $0.01)
Hold to Settlement (Win)	0.7% of payout (min $0.01)
Hold to Settlement (Lose)	$0

FAQ: Kalshi Fees and Net Price Math

Q1: Do you pay both the trading and settlement fee if you lose?

A: You pay the trading fee when you buy or sell, regardless of outcome. The settlement fee is only charged when you receive a payout (i.e., your contract resolves in your favor). If you lose, no settlement fee is charged.

Q2: Are Kalshi fees higher or lower than other prediction markets?

A: For those who hold to settlement, Kalshi’s total fee (1.4%) is lower than Polymarket’s 2%. For those who trade in and out before settlement, Polymarket can be cheaper, as it charges no trading fee. Sportsbooks typically incorporate their edge in the odds rather than explicit fees.

Q3: How can I quickly find where the best net prices are after fees?

A: Manual calculation can be tedious, especially with changing odds and notional limits. Automated services like ArbMonster scan all major sportsbooks, Kalshi, and Polymarket, adjusting for all fees and fillable sizes, showing you the real net price on each side of the market.

ArbMonster is a data service. Nothing here is financial or betting advice; markets carry risk, venues have age and jurisdiction restrictions, and you are responsible for verifying everything before acting.