Kalshi glossary: ten terms, each with a real trade

Ten terms, each with a real example from the exchange. If you have opened Kalshi and the screen made no sense, start here. Every example comes from a lab that has placed more than six thousand real orders on Kalshi and publishes every result.

A market

One yes or no question with a deadline.

A real one: will Bitcoin be above $83,846.00 at 6:00 AM Eastern on October 1. The number is called the strike. Bitcoin finished below it, so No won. A new 15 minute market opens every 15 minutes, all day.

Watch this term in the video, at 0:12

A contract, Yes and No

A pair. One trader buys Yes, another buys No, and the two prices always add up to one dollar.

Halfway through that market Yes cost 20 cents and No cost 80. At the deadline the winning side takes the whole dollar and the other side gets nothing. You are trading against another person, never against the exchange.

Watch this term in the video, at 0:36

The price

The market's estimate of the chance it happens.

Yes at 34 cents means about 34 percent. As Bitcoin fell away from the line in that market, the price of Yes fell with it, second by second. You make money over time only if you buy when the real chance is higher than the price.

Watch this term in the video, at 0:59

Bid, ask and the spread

The bid is the most anyone will pay now. The ask is the cheapest anyone will sell. The spread is the gap.

On a real market on August 5 the bid was 79 cents and the ask 82, a spread of 3 cents. Buy immediately and you pay the ask. Sell immediately and you get the bid. The spread is the first cost of every trade, before any fee.

Watch this term in the video, at 1:17

Maker and taker

A taker accepts the price on offer and is filled instantly. A maker places an order at a better price and waits.

On that same market a taker buys at the ask of 82 cents. A maker rests a bid at 80 and is filled only if someone chooses to sell to it. The taker pays the spread. The maker avoids it, and may never get the trade.

Watch this term in the video, at 1:37

Filled

The moment your order becomes a position.

A bid rests at 80 cents. For 33 seconds nothing happens. Then a seller comes down to 80 and the order fills. A few minutes later the price fell to 10 cents, which is the usual timing: resting orders tend to fill when someone else wants out. That market came back, settled Yes, and the 80 cent contract paid a dollar.

Watch this term in the video, at 1:52

Fees

Takers pay a fee that depends on the price. Makers usually pay nothing.

The taker fee is highest at 50 cents, about $1.75 for 100 contracts, and smaller near the edges. It always rounds up, so taking one contract costs 2 cents at 50 and never less than 1 cent. Makers pay nothing on most markets and a quarter of the taker fee on about 130 of the biggest series. The list is here.

Watch this term in the video, at 2:16

Settlement

How the market decides who won.

The 15 minute Bitcoin markets do not settle on the final price. They settle on the average of the last 60 seconds of the CF Benchmarks index. In our example the average was $83,744.65, below the $83,846.00 line, so it settled No. That average is why the last seconds look random on a chart.

Watch this term in the video, at 2:37

Favourite and longshot

The side priced above 50 cents is the favourite. The side below is the longshot.

Across 21,796 trades, prices mostly kept their promise. Longshots under 30 cents promised 15.6 percent and paid 14.2. The cheap side is slightly overpriced. The study.

Watch this term in the video, at 2:57

Paper trading and real money

Paper trading is simulated trading with no money. It is where everyone should start, and it overstates results.

The same rule made $97.13 on paper and lost $16.70 with real money. On paper you are filled whenever the price touches your order. With real money you are filled when someone wants to sell to you. Every strategy, both ways.

Watch this term in the video, at 3:17

Opening a Kalshi account? Here is our referral link. Disclosure: Kalshi adds a bonus credit to new accounts that trade $25, in an amount Kalshi sets, and the lab receives a trading credit too. It changes nothing about what is published here, and none of this is advice.

Where to go next

If you want to see what happened when the lab traded these markets with real money, every strategy and every result is in one video. If you are thinking of building a bot, Before you build a Kalshi bot is the lessons in the order you will need them, free.

None of this is advice. It is how the exchange works, shown on its own data.