Spread
The gap between the highest price buyers will pay and the lowest price sellers will accept. A wide spread makes it costlier to enter and exit a position.
On Kalshi, the spread is a hidden cost: if you buy at the ask and later sell at the bid, you lose the spread even if the market never moves. Tight, liquid markets have small spreads; thin ones can have spreads that erase an edge before it plays out.
The spread is the gap between the highest price buyers are bidding and the lowest price sellers are offering. On a Kalshi market quoted 58 bid and 62 offer, the spread is 4 cents. It represents the immediate cost of getting in and out: buy at the offer and sell at the bid right away, and you lose the spread.
Spread width is a quick read on a market's liquidity and on your cost to trade. Tight spreads (1 to 2 cents) signal an active, liquid market where round trips are cheap. Wide spreads signal thin interest, where taking liquidity is expensive and a single order can move the price. Crossing a wide spread is one of the most common, and most overlooked, drains on returns.
You can avoid paying the full spread by posting a limit order inside it and waiting to be filled, acting as a maker rather than a taker. That trades certainty for cost: you might get a better price, or the market might move away and leave your order unfilled.
A market is 58 bid, 62 offer, a 4-cent spread. If you buy at 62 and immediately sell at 58, you have lost 4 cents per contract to the spread alone, before any fees, which is why crossing wide spreads repeatedly erodes returns.
Frequently asked questions
What is the bid-ask spread?
It is the difference between the best bid (highest buyer price) and the best offer (lowest seller price). It is the immediate round-trip cost of taking liquidity on both sides.
Why does a wide spread cost me money?
Because taking liquidity means buying at the offer and selling at the bid. The wider the gap, the more you pay just to enter and exit, independent of whether your view is right.
How do I avoid paying the spread?
Post a limit order inside the spread and wait to be filled as a maker. You may get a better price, at the risk that the market moves away and your order does not fill.