Costs of event trading pros and cons
Pros and cons
- Low cost fees for prediction markets
- Simple fee structures for users
- Fees vary across platforms
- Can make smaller trades less profitable
What are the costs of event trading?
Before we can look at fees for prediction markets, you’ll need to know how they operate. In essence, prediction markets are legal and allow you to buy and sell contracts linked to real world events. This involves taking a simple yes or no stance on a question like ‘will Seattle win the Super Bowl’ and purchasing a contract priced between 1c and 99c. The higher the price, the more likely the market believes the event is to happen. When the event resolves, the contract will either be worth $1 if your stance was correct, and if you were wrong your contract is worth nothing.
As the price can fluctuate between your purchase and when it resolves, you could also sell your contracts for a profit or to mitigate a loss instead of waiting for the end. This flexibility is why so many users find prediction markets so appealing and go looking for the
best prediction market sites.
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Certain limitations apply. The offer is available to new users only, subject to the terms and conditions at http://kalshi.com/tc/55. 18+ only. Restrictions and eligibility requirements apply. Event contract trading involves significant risk and is not appropriate for everyone. Please carefully consider if it is appropriate for you in light of your personal financial circumstances. Kalshi products are not available in all jurisdictions. See kalshi.com/regulatory for more information.
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18+ Only. Restrictions and eligibility requirements apply. Not available in all jurisdictions. Trading involves high risk and may result in loss of your entire investment. See polymarket.us/tos for more information. The Polymarket US App serves as an independent software provider and affiliate of Polymarket US and Polymarket Clearing, the CFTC-regulated derivatives exchange and clearing organization.
Finding the best prediction markets
These platforms are becoming more well known, and there are currently three big names that come up in conversation. For many users, it was simply a straight
Kalshi vs Polymarket
shoot outwith the big difference for many being that Kalshi used FIAT currencies and Polymarket was crypto based. Robinhood have also now joined the chat, and there are more factors involved, with costs of event trading being right near the top of the list. For that reason, we need to take a look at the fees involved with buying and selling yes/no contracts on these platforms, and also put them in the context of regular users making predictions.
Prediction market fees
Here is a snapshot of typical fees at the top three platforms, so you can see
Kalshi vs Robinhood
vs Polymarket at a glance. Always remember though that fees can change, especially in a competitive market like event trading, so always double check on the platform before you sign-up.
| Platform |
How fees are charged |
| Kalshi |
This is a variable fee on executed trades. Fees are charged as a percentage of the contract’s expected earnings. |
| Polymarket |
No fees at present, but you are charged network fees for the transaction |
| Robinhood |
Small commission per contract, typically 1c or 2c per contract |
What difference do these different fee structures make to users?
As you can see, there is a difference between the costs of event trading at each platform and that can have a bearing on which one you might choose. For users who go into prediction markets to trade, i.e. buy a yes contract at 42c and then sell when it increases in value, the fees will have an effect on the price they might sell at, and the profit they make. For contracts that have very little variance, this will also mean any price movement will be swallowed up by fees and therefore not worth trading. If a user intends on holding until the event resolves, a fixed fee might be better than a percentage if there is a huge price movement, so users will need to pick their platform carefully.
This will have a bearing on how users are predicting many real world events, from politics to the environment to major sporting events. This last market has been the subject of much controversy, and while there could easily be a
prediction markets vs sportsbooks
debate about which might be better for sports fans, the reality is they are very legally very different platforms and it is up to users to decide which they feel best suits their needs.
Conclusion – always be aware of the costs of event trading
Prediction markets and event trading are quite new concepts to a lot of users, so of course there will be questions. One of those questions regards fees for trading, and knowing how it all works can affect your strategy and the timing of which contracts you buy and sell. Once you know the fee structures of Kalshi, Polymarket and Robinhood, you can decide which platform is best for your strategy and get started as soon as you feel you already. And if you are ready now, you can click the banners on this page to get started at these event trading sites.
Check out these top economic predictions
1.
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Certain limitations apply. The offer is available to new users only, subject to the terms and conditions at http://kalshi.com/tc/55. 18+ only. Restrictions and eligibility requirements apply. Event contract trading involves significant risk and is not appropriate for everyone. Please carefully consider if it is appropriate for you in light of your personal financial circumstances. Kalshi products are not available in all jurisdictions. See kalshi.com/regulatory for more information.
2.
Deposit $10 get a $25 Trading Bonus
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18+ Only. Restrictions and eligibility requirements apply. Not available in all jurisdictions. Trading involves high risk and may result in loss of your entire investment. See polymarket.us/tos for more information. The Polymarket US App serves as an independent software provider and affiliate of Polymarket US and Polymarket Clearing, the CFTC-regulated derivatives exchange and clearing organization.
3.
Trade $100 Get $20 in Bitcoin
4.
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First time deposit match up to $1,000 in Bonus Funds
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Trading involves risk, including total loss on positions. Trading decisions and their consequences are your sole responsibility. Nothing on underdogexchange.com constitutes a recommendation, solicitation, or offer to buy or sell any financial instrument. UDX is subject to CFTC regulatory oversight. Promotion issued by affiliate.
Costs of event trading FAQs
💰 What are the costs of event trading?
The costs of event trading will depend on which platform you are using. Some will use a fixed fee, others will use a percentage so always check the T&Cs to make sure you know the costs before you sign up.
💵 Is Kalshi cheaper than Robinhood?
Fee structures can change, so always check first but in basic terms Kalshi charges a percentage and Robinhood a fixed fee, so it will depend on the size of your trade. There is also Polymarket which is crypto first and only charges a network fee for the transaction.
📜 Is event trading legal?
Yes, it is legal provided you are using a CTFC authorized platform. The big names here are Kalshi and Polymarket, but you’ll have to check out reviews for both to see which is the best for you.
