Kelly criterion and EV calculator

How the calculator works

A Kalshi contract pays $1 if your side wins. Call your probability p and the all-in cost per contract k, which is the price plus the fee. Expected value per contract is the chance of collecting $1 minus what you pay.

The Kelly criterion finds the share of bankroll that maximizes long-run growth when similar bets repeat. A contract that costs k gains 1 - k when it wins and loses k when it loses, which gives:

The calculator sizes with the fee formula before rounding, divides the stake by k and rounds down to whole contracts. It then prices that order with Kalshi's rounding to $0.0001. For a NO contract, enter the NO price and your chance that NO wins.

Worked example

You put a contract at 62% and can buy it at 55c as a taker. The fee is 0.07 × 0.55 × 0.45 = 1.7325c, so k is 56.7325c and EV is 5.27c per contract. Full Kelly is 5.2675 / 43.2675 = 12.17% of bankroll. Without the fee it would be 15.56%. Half Kelly on $1,000 is $60.87, which buys 107 contracts for $60.7038 including the fee. The position gains $46.30 if it wins and loses $60.70 if it loses.

Many traders size below full Kelly because the formula assumes the probability is right. With a small edge, half Kelly keeps about 75% of the long-run growth rate at half the volatility.

The Kelly criterion for Kalshi contracts covers the derivation, the NO side and what happens when an estimate is off. How to calculate expected value on a Kalshi contract has break-even odds and EV examples. This is arithmetic, not advice.

Questions traders ask

What is the Kelly criterion for a prediction market contract?

It is the share of bankroll that maximizes long-run growth over repeated bets. For a contract that pays $1 and costs k all in, full Kelly is (p - k) / (1 - k), where p is your probability. At 62% and a 55c ask with the taker fee, that comes to 12.17%.

Does the calculator include Kalshi fees?

Yes. The fee raises the cost per contract, which lowers both EV and the Kelly fraction. Pick Taker, Maker fee or No fee to match how the order fills. The cost of the order uses Kalshi's rounding to $0.0001.

What is half Kelly?

Half Kelly stakes half the fraction the formula gives. With small edges it keeps about 75% of the long-run growth rate and halves the volatility. Quarter Kelly keeps about 43% of the growth rate.

Why does the calculator show zero contracts?

Your probability is at or below the break-even cost. So EV is zero or negative, and Kelly sizes the position at zero. A small bankroll can also leave the Kelly stake below the cost of one contract.

What if the order book holds fewer contracts than Kelly says?

Enter the contracts available at your price and the calculator caps the size there. The next price level costs more, so its EV and Kelly fraction need a fresh calculation.

Sources

• J. L. Kelly Jr., A New Interpretation of Information Rate, Bell System Technical Journal 35(4), 1956 (accessed Oct 19, 2026)
• E. O. Thorp, The Kelly Criterion in Blackjack, Sports Betting and the Stock Market, Handbook of Asset and Liability Management, 2006 (accessed Oct 19, 2026)
• Kalshi, Fee Schedule for July 2026, 7.7.26 update (accessed Oct 19, 2026)
• Kalshi API documentation, Fee Rounding (accessed Oct 19, 2026)