What is Kalshi? How it works and whether it is legit
9 min read
By the Totalis team. We build the combo platform for prediction markets on Hyperliquid.
Kalshi is a US exchange, regulated by the Commodity Futures Trading Commission (CFTC), where you buy and sell Yes or No contracts on real-world events such as Fed decisions, elections, the weather and sports games. Each contract pays $1 if the event happens and nothing if it doesn't, so a price of 85 cents means the market puts the chance at about 85%. It is legit in the regulatory sense: a CFTC-designated exchange since 2020 with its own CFTC-registered clearinghouse. Several states are in court over its sports contracts, and a few have won orders against them.
Contents
This page is information, not financial or legal advice.
How does Kalshi work?#
Every Kalshi event contract is a question with a Yes side and a No side, such as "Will the Federal Reserve hike rates by 25bps at their December 2026 meeting?" A Yes contract pays $1.00 if the answer is yes. A No contract pays $1.00 if it is no. Kalshi says a Yes buyer and a No buyer together put up exactly $1, so if Yes trades at 85 cents, No trades near 15.
Prices move because members trade with each other on an order book. Kalshi says that on its exchange "you are always trading against another member of the platform, not the exchange itself", and its about page says it never limits customers for winning. That is the main practical difference from a sportsbook, which sets the odds and takes the other side; prediction markets vs sportsbooks covers the rest.
You don't have to hold to the end. You can sell your contracts at the current bid whenever the market is open, taking a profit or cutting a loss. If you hold, the market settles after the result is in: winning contracts pay $1 each into your cash balance and losing ones pay nothing. Prediction market odds and payouts explains how to read any price as a probability.
Kalshi lists far more than sports. We counted every open event on Kalshi at 10:06 UTC on 11 November 2026, by Kalshi's own categories. An event is one question, like "Fed decision in Dec 2026?", which can hold several Yes/No markets, one per outcome.
| Category | Open events |
|---|---|
| Elections | 9,011 |
| Sports | 7,106 |
| Financials | 880 |
| Politics | 831 |
| Entertainment | 807 |
| Economics | 535 |
| Climate and weather | 246 |
| Science and technology | 181 |
| Crypto | 135 |
| Mentions | 131 |
| Commodities | 115 |
| Other categories | 102 |
| All categories | 20,080 |
Kalshi also offers combos, which bundle several of its contracts into one position, and perpetual futures. Prediction market combos compared covers how its combos stack up against other venues.
What does a Kalshi trade look like, with real prices?#
Here is one trade priced from Kalshi's order book at 09:59 UTC on 11 November 2026. The market is "Hike 25bps" in Kalshi's December 2026 Fed decision event, which settles on the Fed's 9 December announcement. Yes was offered at $0.85, with about 17,000 contracts available at that price, and bid at $0.84.
Kalshi's fee schedule, effective 7 July 2026, sets the taker fee on most markets as:
fee = 0.07 × C × P × (1 − P)
C is the number of contracts and P the price in dollars. Kalshi rounds up, and a few markets use a different multiplier.
| Step | Amount |
|---|---|
| Buy 100 Yes at $0.85 | $85.00 |
| Taker fee: 0.07 × 100 × 0.85 × 0.15 | $0.8925 |
| Total paid | $85.8925 |
| Fed hikes by exactly 25 basis points: 100 × $1.00 | $100.00 back, a $14.11 profit |
| Fed holds, cuts or hikes by more than 25 basis points | $0, an $85.89 loss |
Kalshi's fee rounding rules keep the balances of members who trade with Kalshi directly to $0.0001, so a direct member pays $0.8925. Members who are not direct, such as those who clear through a broker, are kept to whole cents and would pay $0.90, the figure in the 85-cent row of Kalshi's own fee table. There is no fee at settlement. Two details decide whether this is a good trade. You need a 25-basis-point hike to be more than 85.89% likely to come out ahead, since that is what you paid per contract. And the market's rules count a 50-basis-point hike as No for this contract, because "Hike >25bps" is a separate outcome; it was trading at $0.10 to $0.11 at the same moment.
If you change your mind before 9 December, you can sell at the bid, $0.84 at the time of this snapshot, and pay a second taker fee. The fee peaks at $1.75 per 100 contracts at 50 cents and falls toward the extremes. Kalshi fees has the full schedule, and lowest-fee prediction markets compares it with other venues. The same Fed decision trades elsewhere too, as our guide to Fed rate decision markets shows.
How does Kalshi make money?#
From fees. Kalshi says it charges a transaction fee on the expected earnings of the contract, the formula above. Some markets also charge makers, the traders whose resting orders get filled, at a quarter of the taker rate. The fee schedule sets no settlement or membership fee and charges nothing for ACH deposits or withdrawals, but up to 2% on card deposits.
Is Kalshi legit?#
Yes, in the sense that matters for your money: it is a federally regulated US exchange that holds customer funds under CFTC rules. The details:
It is a regulated exchange. The CFTC designated KalshiEX LLC as a contract market on 4 November 2020, and Kalshi's help center confirms it is regulated as a Designated Contract Market. Kalshi's about page says it was founded in 2018 by Tarek Mansour and Luana Lopes Lara, and in May 2026 it raised $1 billion at a $22 billion valuation. It is a private company; Kalshi stock covers whether you can invest in it.
A CFTC-registered clearinghouse holds the money. Kalshi now clears its contracts through Kalshi Klear LLC, an affiliate. The CFTC registered Kalshi Klear as a derivatives clearing organization on 28 August 2024 for fully collateralized swaps. Fully collateralized means every position is paid for in full up front: there is no leverage, and the $1 owed to the winner is already sitting there. In a 2026 filing with the CFTC, Klear says customer funds and positions are held in segregation under Part 22 of the CFTC's rules, separate from the company's own money.
FDIC cover is partial, not promised. Klear's self-clearing member agreement, which every Kalshi member accepts, says deposits sit in Klear's settlement account at Silicon Valley Bank with an insured cash sweep. It also warns that because that account is not in your name, FDIC insurance is not assured for you, and that newly arrived funds may not be swept until two business days after they land. Kalshi is not a bank, and its balance is not a bank deposit in your name.
States dispute its sports contracts. Courts disagree on whether states can treat Kalshi's sports contracts as unlicensed gambling, and orders in Nevada, Washington and Michigan now block them there. The state actions target Kalshi and, in Utah, its two co-founders, who face criminal charges that are still allegations; none we found targets its traders. Is Kalshi legal? has the dated state-by-state table.
Does Kalshi actually pay out?#
Yes, in dollars, to your cash balance first. Kalshi says most markets settle within a few hours after the outcome is known, often within about 3 hours, and longer when it waits for an official source such as a league or a government agency. Winning contracts then pay $1 each into your cash balance, and from there you withdraw.
| Withdrawal method | Typical time, per Kalshi | Kalshi's fee | Who can use it |
|---|---|---|---|
| Bank transfer (ACH) | A few business days | None | US accounts |
| Debit card | Within a few hours | None | US-issued cards; limited elsewhere |
| Crypto | Within 30 minutes | None | Needs a prior crypto deposit |
US accounts can also withdraw to PayPal or Venmo, per Kalshi's transfers FAQ.
If you can't cash out, one of three things is usually the cause. Money in open positions can't be withdrawn until you sell or the market settles. A recent deposit by card or bank transfer can be held for up to 2 days after it settles if you withdraw by a different method than you paid in, per Kalshi's security holds page; winnings beyond your deposits are not held. And debit card withdrawals can stall during a payment processor's review, which Kalshi says takes 3 to 5 business days. Every account also has a personal daily withdrawal limit that rises with activity.
Who can use Kalshi?#
To open an account you must be 18 or older and pass identity checks. Kalshi asks for a driver's license or passport and may ask for proof of address or source of funds.
Kalshi takes traders from the US and many other countries, where deposits run through debit card, wire (from $1,000) or crypto. Its Member Agreement bars event contract trading from 55 named jurisdictions and sanctioned regions, including the UK, Canada, Australia, New Zealand, India, Singapore, the UAE, France, Italy, Ireland, Poland, Portugal and Switzerland.
Inside the US, Kalshi publishes no list of state restrictions. Court orders require it to block sports contracts in Michigan, sports, election and entertainment contracts in Nevada, a wider set of categories in Washington, and sports on the lands of California tribes that sued it. Other markets, such as economics, stay open there. The details by state are in is Kalshi legal?
If Kalshi isn't open to you, Kalshi alternatives and the list of prediction markets cover other venues by country. One of them is Totalis, which we build: it trades Hyperliquid's outcome markets one at a time or as Combos of 2 to 5 outcomes priced by market makers. Totalis is not available to US persons or anyone in the US, and signing up takes an invite code. Its docs explain how a Combo is opened, cashed out and settled and list every Combo fee and limit. You can browse Totalis markets before you have a code.
Frequently asked questions#
Is Kalshi a scam?#
No. Kalshi's CFTC designation and Kalshi Klear's CFTC clearing registration are public records, and the CFTC oversees both. That doesn't make every trade a good idea: the fee and the spread come out of every round trip. Can you make money on prediction markets? looks at who wins and why.
Does Kalshi pay interest on your balance?#
Yes, for US accounts. Kalshi pays a variable 3.50% APY on cash and open positions if your average monthly balance is at least $250. It accrues daily and pays monthly, and you need to give your Social Security number to receive more than $10 a year.
What is the Kalshi app?#
It is the mobile version of the same exchange: one account, the same markets and the same order book as kalshi.com. Deposits, withdrawals and trading work in either. Developers can trade through the Kalshi API instead.
How is Kalshi different from Polymarket?#
Kalshi runs in US dollars as a CFTC-regulated exchange. Polymarket runs a crypto-based international platform plus a separate US exchange. What is Polymarket? explains both, and Hyperliquid vs Polymarket vs Kalshi compares the three venues.
Sources and further reading#
- Kalshi fee schedule, effective 7 July 2026, accessed 2026-11-11
- Kalshi, December 2026 Fed decision event, read 2026-11-11 09:59 UTC
- CFTC designates KalshiEX LLC as a contract market, 4 November 2020
- Kalshi Klear self-clearing member agreement, v1.0, accessed 2026-11-11
- Kalshi Member Agreement, accessed 2026-11-11
- Kalshi help: market settlement and payouts, accessed 2026-11-11
This article is for informational purposes only and is not financial advice. Prediction market positions can lose their entire value. Availability of markets and features depends on your jurisdiction and each platform’s terms.