- CFTC-regulated DCM — fully legal for all US residents across all 50 states
- Approved 2020, operational since 2021 — the first regulated US prediction market
- Taker fee formula: 0.07 × contracts × price × (1-price) — peaks ~1.75¢/contract at 50¢
- Maker fees are exactly 1/4 of taker rate — use limit orders exclusively
- Collateral return on MECE sets: the Free Donut's structural foundation
- API: REST + WebSocket + FIX 4.4, supports post_only: true for Maker-only execution
- Weather markets often have only 10–20 contracts at the best ask — thin, requires limit orders
Regulatory Status: What "CFTC-Regulated" Actually Means
Kalshi is a Designated Contract Market (DCM) — a formal regulatory classification under the US Commodity Exchange Act, overseen by the US Commodity Futures Trading Commission (CFTC). It received this designation in 2020 and has been operational since 2021, making it the first regulated prediction market exchange in the United States.
The DCM classification has practical implications for traders:
- Contract guarantee: Kalshi's event contracts are regulated financial instruments, not informal bets. Counterparty risk is managed by the exchange's compliance structure.
- Legal in all 50 states: Because Kalshi operates under federal commodity law, it is not subject to individual state gambling prohibitions that affect offshore platforms.
- Institutional compliance framework: Kalshi is required to publish settlement data to the CFTC daily, maintains AML/KYC procedures, and operates under exchange member obligations.
In March 2026, Arizona filed criminal charges against Kalshi alleging state-law gambling violations. This does not affect Kalshi's federal CFTC authorization, which supersedes state gambling statutes in most interpretations — but the case highlights the ongoing regulatory ambiguity between federal exchange law and state gambling law. Kalshi continues to operate normally.
Market Categories
Kalshi offers standardized event contracts across six primary categories:
| Category | Examples | Strategy Relevance |
|---|---|---|
| Weather | Daily high/low temps, rainfall, snowfall for major US cities | Core: Free Donut, 88¢ Rule, EMOS anchoring |
| Economics | CPI, NFP, FOMC rate decisions, GDP, TSA passenger volume | Bond harvesting, macro mean reversion |
| Politics | US elections, House/Senate control, cabinet nominations | NO harvesting, mean reversion |
| Crypto | 15-min to hourly BTC/ETH/SOL price range contracts | High-frequency, requires speed advantage |
| Sports | NFL, NBA, MLB, NHL, NCAA, Serie A, Champions League | Limited structural edge for retail |
| Cultural | Word mentions in speeches, earnings call topics | Niche; highly illiquid |
For Beatpoly strategies, weather and economics markets are the primary focus. These categories have the best combination of predictable base rates, MECE bracket structures that enable the Free Donut, and sufficient liquidity for retail position sizes.
The Fee Structure (Updated February 2026)
Kalshi updated its fee schedule in February 2026. Understanding the fee math is non-negotiable for any systematic trader.
Taker Fee Formula
Taker Fee = round_up( 0.07 × contracts × price × (1 − price) )
This formula produces fees that peak at 50/50 odds and decay toward zero at price extremes. Example calculations:
- 50¢ contract, 1 unit: 0.07 × 1 × 0.50 × 0.50 = 1.75¢
- 15¢ contract, 1 unit: 0.07 × 1 × 0.15 × 0.85 = 0.89¢ (but ~6.6% of capital invested)
- 90¢ contract, 1 unit: 0.07 × 1 × 0.90 × 0.10 = 0.63¢
Maker Fee Formula
Maker fees are exactly 1/4 of the taker rate: round_up( 0.0175 × contracts × price × (1 − price) )
This means a trader using exclusively limit orders pays 75% less in fees than a market-order trader on every single trade. Over 100 trades at $10/trade, this compounds to roughly $52.50 in fee savings — a margin that separates profitable from unprofitable on borderline-edge strategies.
What Is Free
- Holding positions to settlement: zero fees
- ACH deposits: zero platform fees (3–5 day clearing)
- Wire deposits: zero platform fees (1–5 business days)
The Collateral Return System (The Free Donut Foundation)
This is the most structurally important feature of Kalshi for systematic traders, and the one least understood by retail participants.
For mutually exclusive market groups (MECE sets like temperature brackets), Kalshi calculates the maximum theoretical loss across all of your positions in that set. It then immediately returns the difference — the guaranteed minimum payout — to your available cash balance.
Example: You buy NO on the "below 60°F" bracket at 8¢ and NO on the "above 90°F" bracket at 8¢. Total cost: 16¢. In a MECE 5-bracket system, both your brackets cannot resolve YES simultaneously — at most one of them will. Kalshi returns the "excess" collateral immediately, effectively reducing your capital at risk. This is the mechanical basis of the Free Donut strategy →
In March 2026, Kalshi also received CFTC approval for limited margin trading — the ability to hold positions with less than full collateral in certain circumstances. This is a new development that may affect strategy mechanics as it rolls out.
API and Execution Capabilities
For systematic and algorithmic traders, Kalshi's API infrastructure is institutional-grade:
| Protocol | Use Case |
|---|---|
| REST API | Standard order management, position tracking, market data |
| WebSocket | Real-time market data streaming, live order book updates |
| FIX 4.4 | Ultra-low latency institutional connectivity (same protocol as traditional exchanges) |
Supported order types: Limit, Market, Good-Til-Cancelled (GTC), Fill-or-Kill (FOK), Immediate-or-Cancel (IOC)
The critical parameter for Beatpoly traders: post_only: true — ensures all orders are placed as Maker limit orders and will never accidentally execute as Taker market orders. This single flag is non-negotiable in any production bot or systematic execution setup.
Known Limitations
- US-only: Strictly restricted to US participants. No international access.
- Thin weather markets: Most weather bracket markets have only 10–20 contracts available at the best ask. Position sizes above $50–100 often cause meaningful slippage. Always use limit orders.
- Narrower market selection: Compared to Polymarket, Kalshi covers fewer global events and cities (approximately 6–25 US cities for weather vs. Polymarket's 67+).
- ACH delay: Standard deposits take 3–5 business days to clear. Plan capital allocation accordingly.
Frequently Asked Questions
Use our affiliate link below to sign up. Kalshi's signup bonus is funded by the platform — it's free starting capital for creating an account. After signing up, complete KYC verification, fund your account via ACH or wire, and the bonus will be credited according to Kalshi's current promotion terms.
Yes. Kalshi has both a web platform and mobile apps (iOS and Android). For systematic strategy execution, most serious traders use the API or desktop interface for precision limit order placement. Mobile is adequate for monitoring positions and manual trades.
As a CFTC-regulated DCM, Kalshi is subject to capital requirements and customer fund segregation rules. Customer funds are required to be held separately from company operating funds. This is meaningfully different from offshore platforms where customer capital is commingled. That said, as with any financial platform, there is non-zero counterparty risk.