Risk of ruin is the probability that a string of losses wipes out your bankroll before your edge has time to play out. A profitable strategy can still bust you if you bet too big for your bankroll, so the question is not only whether you have an edge, but whether you can survive the swings.
Enter your win rate, your average win and loss per trade, your bankroll, and how many trades you plan to make. This tool simulates thousands of runs and reports how often the account goes to zero.
Estimate the chance your bankroll hits zero before your horizon, given your real win rate and average win/loss. Simulated over thousands of runs.
RISK OF RUIN OVER 500 TRADES
<0.1%
Your edge is +$2.56 per trade. Ruin is unlikely at this size.
EXPECTED $ / TRADE
$2.56
MEDIAN ENDING BANKROLL
$3,280.00
RUNS THAT GREW
93%
Assumes a roughly fixed average stake (your avg win and loss stay constant). Real sizing varies, so treat this as a guide to whether your current bankroll can absorb your variance, not a guarantee.
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Why risk of ruin matters more than win rate
Two traders with the same win rate can have wildly different odds of survival. The one betting a larger share of a smaller bankroll is far more likely to hit a losing streak deep enough to bust, even with a positive expected value per trade.
Lowering your average stake relative to your bankroll cuts risk of ruin sharply. That is the single most powerful lever a trader controls.
What counts as ruin
Here, ruin means the bankroll reaches zero at any point over your trade horizon. In practice most traders stop well before zero, so treat this as an upper bound on how much variance your current size invites.
FAQ
What is a safe risk of ruin?
Many professional bettors aim to keep risk of ruin under 1 to 5 percent over their planned horizon. Above roughly 10 percent, most traders are sizing too aggressively for their bankroll.
Can I have risk of ruin with a positive edge?
Yes. A positive expected value lowers risk of ruin but does not eliminate it. If your bets are large relative to your bankroll, a normal losing streak can still bust you before the edge compounds.
How do I lower my risk of ruin?
Reduce your average stake relative to your bankroll, improve your win rate or your win-to-loss ratio, or grow your bankroll before scaling up. Smaller bets are the fastest lever.
Stop calculating one trade at a time
ContractTax does this across your whole Kalshi history: real P&L, a Sharp Score that rates your edge, and your tax numbers under every treatment.
These tools are for education and estimation only, not financial or tax advice. Fee estimates use Kalshi’s standard formula and may differ from your actual fees.
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