How does Kalshi work? A beginner's guide

Mike Goodpaster Head Content Writer

Fact checked by:
Jesse M. Cox Last Verified
17/06/2026

Kalshi is a federally regulated prediction market where you trade Yes/No contracts on real-world outcomes, anything from who wins the next NFL game to whether the Fed cuts interest rates next month. If you have ever wondered how Kalshi works, the short answer is this: each contract pays $1 if the outcome you picked happens and $0 if it does not, with the price you pay sitting somewhere in between.

This guide walks through the platform from the ground up. You will learn what Kalshi is, how the contracts work, what you can trade, and how to place your first position. A worked example along the way makes the mechanics concrete.

What is Kalshi?

Kalshi is a US-based event-trading platform founded in 2018 and operating as a Commodity Futures Trading Commission (CFTC)-regulated Designated Contract Market (DCM). That puts it in the same regulatory tier as commodity exchanges like the CME Group, with federal oversight on how contracts are listed, priced, and settled.

The core difference between Kalshi and a sportsbook is structural: there is no house setting prices on Kalshi. You trade directly with other users in a peer-to-peer marketplace, and prices move the way stock prices do, based on what people are willing to pay.

Kalshi is available in most US states in 2026, with a few exceptions covered later in this guide. The platform runs on the web and has dedicated iOS and Android apps, both with full access to markets, order books, and account tools.

How Kalshi event contracts work

Every market on Kalshi is built around a single Yes/No question, such as "Will the Buffalo Bills win against the New England Patriots this Sunday?" or "Will the Federal Reserve cut rates at the next meeting?" Each question has two sides: a Yes contract and a No contract. Buying one is the same as taking that side of the prediction.

Contract prices range from $0.01 to $0.99, and the two sides always add up to $1. If the Yes side is trading at $0.70, the No side is at $0.30. The price reflects the implied probability of that outcome, so a $0.70 Yes contract means traders collectively give it a 70% chance of resolving Yes.

When the event resolves, every winning contract pays out exactly $1, and every losing contract pays $0. Your profit on a winning position is the difference between what you paid and that $1 payout, minus a small trading fee. You can also sell your contracts before the event resolves at the current market price, which is useful for locking in a gain early or cutting a loss if the market moves against you.

If you want a wider grounding in how this category of trading works across platforms, see our guide to what event trading is.

A real-world example

The clearest way to see how this works is to walk through an actual trade. Suppose Kalshi is running a market on the question "Will the Los Angeles Lakers win the NBA Finals this year?" and the Yes contract is currently priced at $0.40.

You think the Lakers' chances are better than 40%, so you buy 100 Yes contracts. Your total cost is 100 × $0.40 = $40, plus a small fee. Here is how the trade can play out:

• Outcome 1: The Lakers win the Finals. Each contract settles at $1, so your 100 contracts are worth $100. Your profit is $100 minus your $40 cost, so $60 (minus fees).
• Outcome 2: The Lakers lose. Each contract settles at $0, and your $40 outlay is gone.
• Outcome 3: You sell early. Halfway through the playoff run, news shifts the market and the Lakers' Yes contract jumps to $0.65. You sell your 100 contracts at the new price, getting back 100 × $0.65 = $65 for a $25 profit (minus fees), without waiting for the final result.

The same logic holds whether you are trading on a sports outcome, an economic data release, or a political event. The number on the screen is always a price between zero and one dollar, and it always settles to $0 or $1.

What you can trade on Kalshi

Kalshi's market coverage goes well beyond sports. The categories span most kinds of measurable real-world outcomes, and new markets are added every week.

How to sign up for a Kalshi account

Opening an account on Kalshi takes a few minutes if you have your ID ready. You will need to be 18 or older (some states require 21+) and physically located in an eligible US state.

1. Open the sign-up page: Head to the Kalshi website or download the iOS or Android app and tap "Sign Up."
2. Choose a sign-up method: Register with your email, or use Google or Apple sign-in to skip the password step.
3. Verify your contact details: Enter the verification code Kalshi sends to your email, then confirm your US phone number with an SMS code.
4. Complete identity verification (KYC): Enter your full legal name, date of birth, and address. Kalshi tries to verify this automatically. If it cannot, you will be asked to upload a government-issued ID and a proof of address.
5. Fund your account: Link a bank account through Plaid, add a debit card, or use a crypto wallet. The minimum deposit is $10 for most methods and $1,000 for wire transfers.
6. Browse markets and start trading: Use the Explore tab to find markets by category, or check the Trending tab to see where other traders are most active.

How to place your first trade

Once your account is funded, placing a trade follows a quick set of steps. Here is the basic flow for buying a contract on a market you have already chosen.

1. Pick a side: Tap "Yes" or "No" on the contract you want to trade. The current price for that side is shown in cents (for example, $0.42 means the market is pricing the outcome at a 42% implied probability).
2. Choose between contracts or dollars: You can enter the number of contracts you want to buy, or enter a dollar amount and let Kalshi calculate the matching number of contracts.
3. Decide market or limit: A market order executes immediately at the best available price. A limit order lets you set a specific price between $0.01 and $0.99, and your order sits on the book until another trader matches it (or you cancel it).
4. Review the trade preview: Kalshi shows your total cost, the trading fee, and your potential payout if the contract settles in your favor. Confirm everything looks right.
5. Submit the order: Once submitted, your position appears in your portfolio. You can hold to settlement, add to the position later, or sell out early at the prevailing market price.

How prices move on Kalshi

Kalshi runs on a central limit order book, the same kind of system used by stock and futures exchanges. Every market shows visible bids (the highest prices buyers are willing to pay) and asks (the lowest prices sellers will accept). The gap between them is the spread, and a narrow spread usually signals high liquidity, which makes it easier to enter and exit positions cleanly.

Prices respond to news and trading activity in real time. If a starting quarterback is ruled out an hour before kickoff, the contract on his team will drop within seconds as traders react. The same thing happens on macro markets when the Fed releases a statement or the Bureau of Labor Statistics publishes a jobs number.

The other thing worth knowing is the maker-taker model. If you place a market order that fills immediately by matching an existing order, you are a "taker." If your limit order sits on the book and gets filled by someone else, you are a "maker." Makers add liquidity to the market and pay lower fees as a result, which is one reason active traders often prefer limit orders over market orders.

Fees and how Kalshi makes money

Kalshi does not build a margin into its prices. The two sides of every market always add up to exactly $1, so the price you see is a clean reflection of market sentiment. Instead, Kalshi earns revenue by charging a fee on each trade, scaled to the potential profit on the contract.

Fees are highest in the middle of the price range, around $0.50, where outcomes are most uncertain. They are lower near the extremes of $0.01 and $0.99 because the market has already largely priced in the result. Maker orders carry a lower fee than taker orders, and across most markets, the total fee rarely exceeds about 3.5% of the trade value.

Deposits and withdrawals are mostly free. ACH bank transfers, PayPal, and Venmo carry no processing fees, and most withdrawals settle within 30 minutes. Debit card deposits carry a 2% fee, and debit card withdrawals carry a flat $2 fee. Crypto transfers (USDC) only pay the underlying blockchain network fees.

Where Kalshi is available

Kalshi is regulated at the federal level under the CFTC, which means it can operate across most US states. The legal landscape for prediction markets is still evolving, though, and a handful of states have pushed back on specific market categories.

As of 2026, Nevada has issued an injunction blocking certain Kalshi contracts (sports, election, and entertainment) in-state, and Maryland is enforcing restrictions on sports markets. A federal appeals court ruling cleared the way for Kalshi users in New Jersey. State-level rules can shift quickly, so it is worth checking which categories are currently active for your location inside the app. For more context on the broader regulatory picture, see our explainer on whether prediction markets are legal.

Account holders need to be at least 18 (21 in some states), pass identity verification, and be physically located in an eligible state when they trade.

The bottom line on how Kalshi works

Kalshi is best understood as an exchange for predictions on real-world events. You buy a Yes or No contract at a price between $0.01 and $0.99, and that price tells you what the market thinks the probability of the outcome is. If you are right, each contract pays $1. If you are wrong, it pays $0. The difference between what you paid and the payout, minus a small fee, is your profit or loss.

What sets Kalshi apart from other ways to put money behind event outcomes is the structure: federal regulation, transparent pricing with no hidden margin, a peer-to-peer order book, and the ability to exit early at the market price. For a deeper look at the platform's features, fees, and day-to-day experience, see our full Kalshi review.

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