Prediction Market Fees Explained: The Real Cost of Every Trade
Prediction market fees reduce your edge by 30-60% on typical trades. Compare Kalshi and Polymarket fee structures with 5 worked examples and break-even math.
Why Fees Matter More Than You Think
You find a Kalshi contract trading at $0.60. You believe the true probability is 70%. That looks like a 10-cent edge. Buy all day, right?
Not so fast. Kalshi charges roughly 7% on profits from winning trades. If the contract resolves Yes, your $0.40 profit becomes $0.40 x 0.93 = $0.372. If it resolves No, you lose your full $0.60 with no fee offset. Run the full math:
Pre-fee EV: (0.70 x $0.40) - (0.30 x $0.60) = $0.28 - $0.18 = +$0.10
Post-fee EV: (0.70 x $0.372) - (0.30 x $0.60) = $0.2604 - $0.18 = +$0.0804
That is a 20% reduction in your expected value. On thinner edges, the damage is worse. A 3% edge on the same contract gets cut by more than half. And on margins below 2%, fees can flip a +EV trade to -EV entirely.
This is why understanding fee structures is not optional. It is the difference between profitable and unprofitable trading. Run any contract through the fee calculator to see the exact impact before you trade.
Kalshi's Fee Structure: Winner Pays
Kalshi charges a percentage of profit on winning trades only. As of early 2026, the standard rate is approximately 7% of net profit, though this varies by contract type and can change.
The asymmetry is the key detail. You eat full losses but share your wins with the platform. This creates a hidden shift in your break-even probability.
Worked example at $0.50: A contract at $0.50 without fees breaks even at exactly 50% true probability. With a 7% winner fee, the break-even shifts:
You need: fee-adjusted win value x probability = loss value x (1 - probability)
$0.50 x 0.93 x p = $0.50 x (1 - p)
$0.465p = $0.50 - $0.50p
$0.965p = $0.50
p = 51.8%
That 1.8% shift does not look like much. But it means any trade where your true edge is under 1.8% is actually -EV after fees. Use the break-even calculator to find the exact threshold at any contract price.
The fee impact scales with contract price. Here is how break-even shifts across the price spectrum:
| Contract Price | Max Profit | 7% Fee | Fee as % of Max Profit | Break-Even Shift |
|---|---|---|---|---|
| $0.10 | $0.90 | $0.063 | 7% | +0.7% |
| $0.30 | $0.70 | $0.049 | 7% | +1.4% |
| $0.50 | $0.50 | $0.035 | 7% | +1.8% |
| $0.70 | $0.30 | $0.021 | 7% | +3.5% |
| $0.90 | $0.10 | $0.007 | 7% | +5.8% |
The pattern is clear. Buying high-priced contracts (above $0.70) on Kalshi requires a much larger edge to overcome fees. At $0.90, you need nearly a 6% edge just to break even. Most traders do not have edges that large on high-probability events.
Polymarket's Fee Structure: The Spread Is the Fee
Polymarket charges no explicit trading fees. Zero percent on profits. Zero percent on losses. That sounds better than Kalshi, but the cost is not zero. It is hidden in three places.
Bid-ask spread. On a liquid market with a 1-cent spread, you pay approximately $0.01 per side. A round trip (buy then sell, or buy and hold to settlement) costs roughly $0.01-$0.02 per contract. On illiquid markets, spreads widen to 3-5 cents per side, and your implicit fee jumps to $0.06-$0.10 per round trip.
Price impact. Large orders move the market. Placing a $5,000 order on a contract with only $500 of liquidity at your target price means you fill at progressively worse prices. A 2-cent average slippage on a $0.50 contract adds 4% to your effective cost.
On/off-ramp costs. Moving USDC onto Polygon (Polymarket's chain) has gas costs and potential exchange fees. These are small per transaction but add up for active traders.
Worked example: You want to buy a Polymarket contract at $0.50. The order book shows the best ask at $0.51. You buy at $0.51. If the contract resolves Yes, you receive $1.00 and your profit is $0.49 (not $0.50). If it resolves No, you lose $0.51 (not $0.50). The 1-cent spread costs you about $0.01-$0.02 of EV depending on the true probability.
Head-to-Head: Kalshi vs. Polymarket Fees by Contract Price
The right platform depends on where the contract trades. Fees do not hit uniformly.
| Price Range | Kalshi Net Cost | Polymarket Net Cost | Lower Cost Platform |
|---|---|---|---|
| $0.05-$0.20 | Low (7% of small profit) | High (spread is 5-10% of price) | Kalshi |
| $0.20-$0.40 | Moderate | Moderate | Depends on liquidity |
| $0.40-$0.60 | Moderate | Low (tightest spreads here) | Polymarket |
| $0.60-$0.80 | High | Low | Polymarket |
| $0.80-$0.95 | Very high (asymmetric risk) | Low | Polymarket |
This table assumes Polymarket markets have decent liquidity (spreads under 2 cents). On thin markets with 4-5 cent spreads, Kalshi can be cheaper even in the mid-price range. Always check actual order book depth before routing.
For a full platform comparison beyond fees, see the Kalshi vs Polymarket comparison.
The 3x Rule: When a Trade Survives Fee Drag
Your estimated edge needs to clear fees by a wide margin to be worth taking. Here is why.
Fees are certain. Your edge estimate is not. If you think your edge is 4% and the fee drag is 2%, your net edge is 2%. But if your probability estimate is off by even 1%, your real net edge could be 1% or zero.
The 3x rule provides a practical filter: your estimated edge should be at least 3 times the fee drag for the trade to be worth the risk.
Worked example: A $0.50 contract on Kalshi has approximately 1.8% fee drag (the break-even shift). Applying the 3x rule, you need at least a 5.4% estimated edge. That means you believe the true probability is at least 55.4% when the contract trades at $0.50.
On Polymarket with a 1-cent spread, the fee drag on a $0.50 contract is roughly 1%. The 3x rule says you need 3% edge minimum. That means a true probability of 53% or higher.
Anything below the 3x threshold is a coinflip after accounting for fees, estimation error, and variance. Pass on those trades and wait for clearer opportunities.
Calculate your net edge after fees on any contract using the PM EV calculator. It shows pre-fee and post-fee expected value side by side.
How Hold Time Changes the Fee Equation
Kalshi fees are charged at settlement. This creates an important distinction between two trading styles.
Hold to settlement. You buy at $0.50 and wait for the event to resolve. If you win, Kalshi takes 7% of your $0.50 profit. Total cost: $0.035.
Trade before settlement. You buy at $0.50 and sell at $0.65 when the market moves in your favor. Kalshi charges no fee on this secondary market trade. Your cost is only the bid-ask spread on entry and exit, similar to Polymarket.
This means short-term traders who capture price movement and exit before settlement pay effectively zero Kalshi fees. The 7% winner fee only applies to contracts held through final resolution.
Polymarket's spread cost hits on every transaction regardless of whether you hold to settlement or trade out early. For an active trader making 10 round trips per week, Polymarket's cumulative spread cost can exceed Kalshi's settlement fee.
The optimal strategy depends on your trading style. Longer holds on high-conviction trades favor Kalshi (assuming you win). Frequent trading and position management favor Polymarket on liquid markets.
This interaction between fees and hold time connects directly to bankroll turnover. Higher turnover strategies multiply your fee drag just as they multiply your edge. If your per-trade fee cost is 2% and you turn over your bankroll 50 times per year, you pay 100% of your bankroll in cumulative fees. Your edge needs to exceed that.
Fee Structures Across All 8 Platforms
As of March 2026, all eight major prediction market platforms are operational in the United States. Each has a distinct fee structure, and choosing the right platform for a given trade can save you 5-10% on fees alone. Here is every platform side by side.
| Platform | Fee Type | Fee Amount | Settlement Model | Notes |
|---|---|---|---|---|
| Kalshi | % of profit (winner pays) | ~7% of net profit | Direct exchange | No fee on losses |
| Polymarket | Implicit (spread) | $0.01-$0.05/side | On-chain (Polygon) | No explicit fee; spread + gas |
| Robinhood | Per-contract | $0.01-$0.02/contract | Routes through Kalshi | Commission-free branding, but per-contract fee applies |
| Coinbase | Per-contract (Kalshi) | Same as Kalshi (~7% profit) | Front-end for Kalshi | Kalshi fee structure applies; check for additional markup |
| DraftKings | Per-contract/side | $0.02/contract/side | CME exchange | $0.04 round-trip cost per contract |
| FanDuel | Exchange fee + markup | $0.01/contract/side exchange | CME partner | Exchange fee disclosed; additional markup undisclosed |
| ForecastEx | Per-contract | $0.01/contract | CFTC-regulated | Requires Interactive Brokers account |
| PredictIt | % of profit + withdrawal | 10% on profits + 5% withdrawal | Direct exchange | Highest total fee load of any platform |
Worked Example: $0.50 Contract Across All 8 Platforms
Buy one contract at $0.50 and hold to settlement. The contract resolves Yes and pays $1.00. Your gross profit is $0.50. Here is what each platform actually costs you:
| Platform | Fee Calculation | Net Profit | Fee as % of Gross Profit |
|---|---|---|---|
| Kalshi | $0.50 x 7% = $0.035 | $0.465 | 7.0% |
| Polymarket | ~$0.01 spread entry | $0.49 | ~2.0% |
| Robinhood | $0.02 per contract | $0.48 | 4.0% |
| Coinbase | $0.50 x 7% = $0.035 (Kalshi fee) | $0.465 | 7.0% |
| DraftKings | $0.02 entry + $0.02 exit = $0.04 | $0.46 | 8.0% |
| FanDuel | $0.01 entry + $0.01 exit + markup | $0.48 or less | 4.0%+ |
| ForecastEx | $0.01 per contract | $0.49 | 2.0% |
| PredictIt | $0.50 x 10% = $0.05 profit fee | $0.45 | 10.0% |
PredictIt is the most expensive by a wide margin. The 10% profit fee plus 5% withdrawal fee means a winning trader on PredictIt loses roughly 15% of gains to platform costs. At the other end, ForecastEx and Polymarket (on liquid markets) offer the lowest fee drag at around 2%.
Note that the FanDuel column shows a minimum. The undisclosed markup on top of the $0.01 exchange fee could push the effective cost higher. DraftKings is transparent but expensive: the $0.02/side fee creates a $0.04 round-trip cost that hits harder on cheap contracts.
For Robinhood traders, the $0.01-$0.02 per-contract fee is lower than Kalshi's percentage-based fee on contracts above $0.30, but the contracts route through Kalshi's order book, so liquidity is identical.
Coinbase functions as a front-end for Kalshi. You get Kalshi's contracts, Kalshi's liquidity, and Kalshi's fee structure. The convenience factor is the main draw for users already in the Coinbase ecosystem.
The cheapest platform depends on your contract price, hold time, and trading frequency. Run any specific trade through the fee calculator to compare exact costs. For a complete platform comparison beyond fees alone, see the best prediction market 2026 guide. For deep-dive fee math across all platforms, the prediction market fees comparison shows worked examples at every price level.
The Bottom Line on Prediction Market Fees
Fees are not a reason to avoid prediction markets. They are a filter. They kill marginal trades and reward high-conviction positions where your edge is large enough to absorb the cost.
The practical workflow: estimate your true probability, subtract the platform-specific fee drag, and only trade when the net edge is meaningful. The fee calculator handles the platform-specific math. The break-even calculator shows exactly how much edge you need to clear zero. The PM EV calculator puts it all together into a single expected value number.
If the price difference between platforms is large enough to overcome fees on both sides, you can sometimes lock in profit through cross-platform arbitrage. And for understanding how sportsbook vig compares to prediction market fees, the sportsbook vs prediction market comparison puts both cost structures side by side.
Frequently asked questions
- What fees does Kalshi charge on prediction markets?
- Kalshi charges approximately 7% of net profit on winning trades. You pay nothing on losing trades. This asymmetry shifts your break-even probability by 1-6% depending on the contract price, with the largest impact on contracts above $0.70.
- Does Polymarket charge trading fees?
- Polymarket charges no explicit percentage fee. Your cost is the bid-ask spread (typically 1-2 cents on liquid markets, 3-5 cents on thin ones) plus blockchain gas fees for deposits and withdrawals. On illiquid markets, spread costs can exceed Kalshi's percentage fee.
- How much edge do I need to overcome prediction market fees?
- Apply the 3x rule: your estimated edge should be at least 3 times the fee drag. On Kalshi at a $0.50 contract, that means roughly 5.4% edge. On Polymarket with tight spreads, roughly 3%. Anything less is marginal after accounting for estimation error.
- Are prediction market fees higher than sportsbook vig?
- It depends on the market. Sportsbook vig on standard -110/-110 lines is about 4.8%. Kalshi's effective fee on a $0.50 contract is about 3.5%. On liquid Polymarket markets, it can be under 2%. But on illiquid prediction markets, costs can exceed sportsbook vig.
- Do I pay Kalshi fees if I sell before settlement?
- No. Kalshi's profit fee applies only at settlement. If you buy at $0.50 and sell at $0.65 before the event resolves, you pay no percentage fee. Your only cost is the bid-ask spread on entry and exit.