Reading Up/Down odds: price, implied probability and fees

A Kalshi contract pays $1.00 if it wins and $0 if it loses. That simple setup makes prices easy to read once you see the trick. This TickTilt guide walks through it, including fees.

Price ≈ implied probability

If "Up" costs 70¢, the market as a whole is pricing roughly a 70% chance that Up wins. Up at 70¢ and Down near 30¢ add up to about $1. They usually add up to slightly more than $1 when you buy at the asking price, because of the gap between buyers and sellers (the spread).

"Implied" is the key word. The price is the crowd's current estimate, not a guarantee and not a fact about the future.

The fee

Kalshi's published fee schedule gives the general taker fee (for orders that match immediately against resting orders) as:

fee = round up(0.07 × C × P × (1 − P))
C = number of contracts, P = price in dollars. Some series apply a multiplier; check the current schedule.

The fee is largest at 50¢ (100 contracts cost $1.75 in fees) and smaller near the extremes. Orders that rest on the book and fill later generally pay no fee on most series, but check the schedule for exceptions.

Break-even example

Say you buy 1 Up contract at 90¢ as a taker. The raw fee is 0.07 × 0.90 × 0.10 = $0.0063. Rounded up to the cent, that's 1¢. Your total cost is 91¢.

• If it wins, you get $1.00: profit 9¢.
• If it loses, you lose 91¢.

To break even you need to win about 91% of the time (0.91 ÷ 1.00), not 90%. One loss erases about ten wins.

Fees round up per order, so buying many contracts at once spreads the rounding and the per-contract fee gets closer to the raw formula.

What this means

A "strong lean" on TickTilt at 95% sounds safe, but if the market already charges 95¢, the price already reflects that. Being right often isn't enough; the win rate has to beat the price plus fees. High-priced contracts win small and lose big.

Sources

Kalshi fee schedule (PDF) · Kalshi fee schedule page