Event contract
A binary contract that pays a fixed amount (typically $1) if a specific event happens and nothing if it does not. Kalshi markets are event contracts, priced from 1 to 99 cents to reflect the market's implied probability of the outcome.
Because the payout is fixed and the price moves between 1 and 99 cents, an event contract's price doubles as a probability estimate. Buying at 40 cents risks 40 to make 60 if the event resolves yes, which is why disciplined traders think in terms of edge versus the implied probability rather than raw dollars.
An event contract is a binary instrument: it settles at a fixed value, typically $1 (100 cents), if a defined event happens, and at $0 if it does not. On Kalshi every market is built from these YES and NO contracts, quoted between 1 and 99 cents. The price you pay is your maximum risk per contract, and the difference between that price and $1 is your maximum profit if the contract settles in your favor.
Because the payout is fixed at a dollar, the price of an event contract behaves like a probability. A contract trading at 40 cents implies the market thinks the event has roughly a 40 percent chance of happening. That framing is what separates disciplined trading from guessing: the question is not whether the event will happen, but whether its true probability is higher or lower than the price you are being asked to pay.
Event contracts differ from sportsbook odds in an important way. A sportsbook quotes a payout and keeps a margin baked into the line, while an exchange like Kalshi matches buyers and sellers and charges a transparent fee. You can also sell a contract before settlement to lock in a gain or cut a loss, rather than waiting for the event to resolve.
You buy one YES contract at 40 cents. If the event happens, the contract settles at $1 and you make 60 cents. If it does not, it settles at $0 and you lose your 40 cents. Buying 100 contracts simply scales that to a $40 risk for a $60 potential profit.
Frequently asked questions
How does an event contract make money?
You profit if it settles in your favor (YES contracts pay $1 when the event happens) or if you sell it before settlement at a higher price than you paid. Your risk per contract is capped at the price you paid.
Why is the price between 1 and 99 cents?
Because the contract pays a fixed $1 at settlement, its price reflects the market's implied probability of the outcome. A price near 99 cents means the market is nearly certain; a price near 1 cent means it is nearly certain not to happen.
Can I sell an event contract before the event resolves?
Yes. Kalshi is an exchange, so you can exit an open position at the current market price at any time before settlement, locking in a profit or limiting a loss without waiting for the event.