Prediction Market Calculator: Implied Probability, Fees, EV & Kelly

The formulas#

With price $P$ , your probability $p$ , $C$ contracts, fee coefficient $θ$ , $D$ days to resolution and annual cost of capital $r$ :

ϕ = ⌈ θ C P (1 - P) ⌉_{cent}, c = P + \frac{ϕ}{C}

EV = C p - (C P + ϕ), EV_{net} = EV - (C P + ϕ) \frac{r D}{365}

p^{*} = c (break-even), f^{*} = \frac{p - c}{1 - c} (Kelly)

Why these matter: the fee is proportional to $P (1 - P)$ and is rounded once per order (fee arithmetic). Full Kelly assumes your probability is exact; with realistic estimation error, a fraction of it is usually better (Kelly with estimation error). Reading the right price to enter is covered in how to read odds.

Questions#

How do I calculate expected value on a prediction market?

Multiply the number of contracts by your probability, then subtract what you pay: contracts × price plus fees. Divide by the amount paid for the expected return, and subtract the cost of capital if resolution is far away.

What fee does the calculator use?

By default the taker formula in Kalshi's published fee schedule, 0.07 × contracts × price × (1 − price), rounded up to the cent per order. You can switch to the maker coefficient (0.0175) or no fee.