9. Kalshi: Regulated Event Contracts

*Some series — notably the S&P 500 / Nasdaq-100 index markets — carry maker fees: since July 2025 a quadratic schedule of ⌈0.0175·C·p·(1−p)⌉, exactly a quarter of the taker fee (it replaced the old flat 0.25¢-per-contract maker fee). Those same index series also take at a halved 0.035 multiplier. Kalshi's 2025 fee-generating volume: $22.9B, with sports ≈ 89% of fee revenue; the venue raised $1B at a $22B valuation in May 2026 and was reportedly seeking ~$40B by June 2026 — young terrain, fast-changing rules. Always re-read the fee schedule.

The mechanics that matter

• One book, two views. The book stores YES bids and NO bids; a YES bid at 7¢ is a NO ask at 93¢. "Buying NO" and "selling YES" are the same act.
• Prices are probabilities. 1¢–99¢, tick = 1¢ (with finer sub-penny structures rolling out via price_ranges[].step).
• MM-friendly API. Amend Order (keep the order's identity; note the fine print — only a size decrease preserves your FIFO spot; a reprice goes to the back of the queue, Ch. 7), batch create/cancel, queue-position endpoint (you can see your FIFO position), self-trade prevention modes (taker_at_cross / maker), cancel_order_on_pause. These exist because Kalshi wants makers.
• Idle cash earns interest (3.25% APY, variable — and it accrues on open-position collateral too), softening the cost of parked capital.

The taker fee: a parabola that designs your strategy for you

Kalshi's taker fee per contract is 0.07·p·(1−p) — a parabola peaking exactly at p = 50¢, where it costs ~1.75¢ per contract. Explore it:

Why quote only the 30–70¢ band?

• Tail asymmetry: sell a 95¢ YES that resolves against you and you lose 95¢ to win 5¢ — one informed counterparty erases 19 good trades.
• Tick coarseness: at 3¢, one tick is 33% of the price; spreads can't compress to fair levels.
• Flow quality: the center is where genuine two-way uncertainty (and noise flow) lives; the tails attract precisely the flow that knows something.