Kalshi works by letting you buy and sell contracts tied to real-world events. Each contract pays $1.00 if the event happens, or $0 if it doesn't. The price you pay reflects the market's probability estimate, and your profit is the difference between your cost and the payout.
Basic Trading Mechanics
Every Kalshi trade follows the same pattern:
- Choose an event: Browse markets for elections, economic data, weather, etc.
- Pick a side: Buy "Yes" if you think it'll happen, "No" if you don't
- Pay the market price: Contracts trade between $0.01 and $1.00
- Wait for resolution: The event either happens or doesn't
- Get paid: Winning contracts pay $1.00, losers pay $0
Example trade: "Will the Fed cut rates in March?" trades at $0.42 (42% implied probability). You buy Yes for $0.42. If the Fed cuts, you make $0.58 profit ($1.00 - $0.42). If not, you lose your $0.42.
Setting Up Your Account
Step 1: Sign Up
Visit kalshi.com and create an account with your email. The process takes about 5 minutes.
Step 2: Identity Verification
Complete KYC (Know Your Customer) verification by uploading a government-issued ID. This is required by CFTC regulations and typically approves within a few hours.
Step 3: Fund Your Account
Link your bank account and initiate an ACH transfer. Deposits are free and usually clear in 1-3 business days. There's no minimum deposit, but $50-$100 gives you room to make several small trades.
Making Your First Trade
Once your account is funded:
- Browse markets: Use filters to find events you understand (politics, economics, etc.)
- Check liquidity: Look for markets with tight spreads (small difference between bid and ask)
- Review the question: Understand exactly what you're betting on and how it resolves
- Decide Yes or No: Buy Yes if you think the event happens, No if you think it doesn't
- Enter quantity: Choose how many contracts to buy (each contract is capped at $1.00 payout)
- Place your order: You can use a market order (instant fill) or limit order (set your price)
Understanding Contract Pricing
Kalshi prices reflect probability:
| Price | Implied Probability | Interpretation |
|---|---|---|
| $0.10 | 10% | Very unlikely (10x payout if wins) |
| $0.30 | 30% | Unlikely but possible (3.3x payout) |
| $0.50 | 50% | Coin flip (2x payout) |
| $0.70 | 70% | Likely (1.4x payout) |
| $0.90 | 90% | Very likely (1.1x payout) |
Lower prices offer higher percentage returns but lower win probability. Higher prices offer safer bets but smaller returns.
Order Types Explained
Market orders: Execute immediately at the best available price. Use when you want instant entry and don't mind paying the current ask (or receiving the current bid).
Limit orders: Set your own price and wait for the market to come to you. Use when you want a specific entry price and can wait for a fill. If the market never reaches your price, your order won't execute.
Tip: Limit orders help you avoid overpaying in low-liquidity markets. Set your limit between the bid and ask to potentially get filled at a better price.
How Markets Resolve
Each market has clear resolution criteria:
- Source specified upfront: Kalshi lists the exact data source (e.g., "Bureau of Labor Statistics jobs report")
- Automatic settlement: Most markets resolve automatically shortly after the event
- Manual review: Some markets require Kalshi review for edge cases
- Dispute process: If you disagree with a resolution, you can request review
Payouts appear in your account immediately after resolution. You can then withdraw or reinvest in new markets.
Withdrawing Your Money
Cashing out is simple:
- Go to your account settings
- Select "Withdraw"
- Choose ACH (free, 1-3 days) or wire transfer (faster, may have fees)
- Enter the amount
- Confirm the transaction
There are no withdrawal fees or limits (beyond your account balance). Money typically hits your bank in 1-3 business days for ACH.
Basic Trading Strategies
Directional trading: Take a position on events where you have informed opinions or research. Example: You follow Fed policy closely and trade rate decision markets.
Arbitrage: Exploit price differences between related markets. Example: If state-level odds don't match national odds, there's potential edge.
Mean reversion: Trade against emotional overreactions. Example: If a candidate's odds crash 20% on minor news, you might fade the move if fundamentals haven't changed.
Risk management: Never bet more than 1-5% of your account on a single market. Diversify across multiple events to reduce volatility.
Common Beginner Mistakes
- Overtrading low-liquidity markets: Wide spreads eat into profits
- Ignoring resolution criteria: Make sure you understand exactly what needs to happen
- Emotional trading: Don't chase losses or double down after a bad beat
- Oversizing positions: Start small until you understand the mechanics
- Not using limit orders: Market orders can fill at bad prices in thin markets
Using the Kalshi App
Kalshi offers iOS and Android apps with full functionality:
- Browse and trade all markets
- Real-time price updates and notifications
- Portfolio tracking and P&L
- Instant deposits and withdrawals
- Same account and funds as web platform
The app is ideal for monitoring positions and reacting to breaking news while away from your computer.
Bottom Line
Kalshi works by letting you trade contracts on real events at prices reflecting market probabilities. You buy Yes or No, wait for the event to resolve, and either make a profit or take a loss based on the outcome.
Start with small trades on events you understand, use limit orders to control your entry price, and always know exactly how each market resolves before committing capital.