Reference

A Prediction Markets Glossary, Written the Way Traders Talk

Nobody inside these markets says trading fee. They say maker, taker, half-spread. Sixty-six terms below, in the register people actually use, each with a one-sentence definition, what it costs you in money, and a worked number wherever the arithmetic allows one.

Two vocabularies exist for prediction markets. One is the vocabulary search tools index, and it is full of phrases like betting tips and trading fee. The other is the vocabulary of the people trading, and it is full of phrases like dead brackets, quote lag, fill haircut and picking pennies on an active railroad track. This page documents the second one, because it is the one that tells you where the money goes.

Every entry carries the same five things: the term, a one-sentence definition, why it matters in money terms, a worked number where one is possible, and links to any guide on this site that uses it. Where no number is possible, the entry says so rather than inventing one.

Correction, 11 August 2026

This page previously defined vig wrongly, for both venues. The older wording said that prediction markets charge a small fee on winnings, not a vig on every bet. Both halves are wrong. Neither Polymarket nor Kalshi charges a fee on winnings: both compute a fee at the moment a trade executes, from the contract price, using a published formula. And a taker on either venue does pay a fee on every trade, which at some prices is close to what a sportsbook keeps.

The full replacement is the vig entry below, with the arithmetic for both venues. Of the eleven competitor pages audited for this site in July 2026, none had ever published a correction. This is ours.

The one piece of arithmetic that runs through half these entries

Both venues charge the taker a fee shaped the same way. Per contract, it is the fee rate multiplied by the price, multiplied by one minus the price. Written out, with C as the number of contracts and P as the price in dollars:

fee = C × rate × P × (1 - P)

That looks like a fee on the trade's value. It is not. Because the number of contracts you get for a fixed amount of money is C = stake / P, the price cancels out of one term and the fee as a fraction of what you staked becomes:

break-even = rate × (1 - P)

So the cost is a parabola with its peak at fifty cents, not a flat percentage. A contract at ninety cents is cheap to trade. The same contract at ten cents costs nine times as much for the same money down. Any page that quotes one percentage for these venues is describing a curve with a single point, and that is the error that makes most published fee arithmetic on this niche wrong.

Illustrative arithmetic. Taker and maker fees as a percentage of the money you put in, computed from each venue's published formula at seven prices. Not a record of trades.
Entry price	PM maker	PM 4% cats	PM 5% cats	PM 7% crypto	Kalshi taker	Kalshi maker
5c	0.00%	3.80%	4.75%	6.65%	6.65%	1.66%
10c	0.00%	3.60%	4.50%	6.30%	6.30%	1.58%
25c	0.00%	3.00%	3.75%	5.25%	5.25%	1.31%
50c	0.00%	2.00%	2.50%	3.50%	3.50%	0.88%
75c	0.00%	1.00%	1.25%	1.75%	1.75%	0.44%
90c	0.00%	0.40%	0.50%	0.70%	0.70%	0.18%
95c	0.00%	0.20%	0.25%	0.35%	0.35%	0.09%

Polymarket's rate is set per market category: 7% on crypto, 5% on sports, economics, culture, weather and other, 4% on finance, politics, tech and mentions, and a verified zero on geopolitical. Polymarket makers pay nothing at all. Kalshi's figures are before its round-up to the next whole cent, which only raises them, and raises them most on small positions in cheap contracts. Kalshi charges half rate, 0.035, on its S&P 500 and Nasdaq-100 contracts.

For comparison, a sportsbook pricing both sides of a coin flip at -110 holds about 4.55% of a balanced book, at every price, and you cannot opt out of it by being patient. On these two venues a patient maker on Polymarket pays zero, and a patient maker on Kalshi pays a quarter of the taker rate. That difference is the whole reason the word vig does not transfer.

The book, and getting filled

Twenty terms about the mechanism. Almost every avoidable loss on these venues happens here rather than in the forecast.

order bookalso: the book#

The list of every unfilled buy and sell order on a contract, stacked by price, which is what you are actually trading against on both Polymarket and Kalshi.

Why it costs money. The headline price is only the first row. What you pay is decided by the rows underneath it, and how far down them your order has to reach.

Worked example, illustrativeA book showing 5,000 at 47c, then 3,000 at 49c, then 12,000 at 53c is not a market at 47c. It is a market at 47c for the first 5,000 contracts and nowhere near it after that.

Used in Reading order books, What is Polymarket, Low-liquidity markets

best bidtop of book, bid side#

The highest price anyone is currently offering to buy at, and therefore the price you receive if you sell immediately.

Why it costs money. This is your exit price, not the price on the market's tile. A position is worth the best bid, minus whatever slippage taking it involves.

Worked example, illustrativeYou bought at 50c. The screen says the market is at 50c. If the best bid is 46c, your realisable value is 46c, so the position is already 8% underwater on exit before anything has happened.

Used in Reading order books, The API, for developers

best askalso: best offer#

The lowest price anyone is currently offering to sell at, and therefore the price you pay if you buy immediately.

Why it costs money. Every quoted probability you see on a market tile sits somewhere between the best bid and the best ask. You never trade at the tile price. You trade at one of the two edges.

Worked example, illustrativeBest bid 46c, best ask 50c. The tile might say 48%. A buyer pays 50c and a seller receives 46c, so the two of them disagree with the tile by 2c each, in opposite directions.

Used in Reading order books, What is Polymarket

spreadbid to ask distance#

The gap in cents between the best bid and the best ask, which is the cost of buying and immediately selling again.

Why it costs money. On these venues the spread is usually a larger cost than the venue fee, and it is paid to another trader rather than to the venue. Screening on fees while ignoring the spread gets the ranking of your costs backwards.

Worked example, illustrativeA 4c spread on a contract near 48c is roughly 8.3% of the money you put down. The Polymarket taker fee on a politics market at 50c is 2.00%. The spread is about four times the fee.

Used in Reading order books, Risk framework, Kalshi for non-US traders

half-spreadthe cost of crossing#

Half the spread, which is what it costs to cross from the midpoint to the side you want, and the number traders quote instead of saying trading fee.

Why it costs money. It is the correct unit for a single trade. The full spread is the round trip. If you only intend to buy, you pay the half.

Worked example, illustrativeBid 46c, ask 50c, midpoint 48c. The half-spread is 2c, which on a 48c midpoint is 4.2% of stake. A maker who rests at 46c and gets filled collects that 2c instead of paying it, which is the entire economic case for being patient.

Used in Reading order books

depthalso: liquidity at price#

How many contracts are resting at each price level, which decides how much you can trade before the price moves against you.

Why it costs money. Depth, not the spread, sets the maximum size of any strategy. An edge that is real at 200 contracts and vanishes at 5,000 is not a strategy, it is a hobby.

Worked example, illustrativeIf 5,000 contracts rest at the best ask and you need 10,000, half your order is priced by whatever sits above it. Your effective cost is the weighted average of all the levels you consume, not the level you clicked.

Used in Reading order books, Low-liquidity markets, Comparing venues

thin booknot: thin liquidity#

A book with so little depth that an ordinary sized order moves the price several cents by itself.

Why it costs money. A thin book is where the largest apparent edges live and where they are least collectable. You move the price you were trying to exploit, and then you cannot exit at the new one either.

Worked example, illustrativeA 3c mispricing on a book holding 400 contracts is worth at most $12 gross before fees. The same 3c on a book holding 40,000 is worth $1,200. The signal is identical; the trade is not.

Used in Low-liquidity markets, Reading order books

slippagewalking the book#

The difference between the price you saw and the average price you actually paid, caused by eating through more than one level of the book.

Why it costs money. It is the cost most people leave out of their arithmetic entirely, and on a thin book it is larger than the fee and the spread put together.

Worked example, illustrativeBuying 10,000 contracts into 5,000 at 47c, 3,000 at 49c and 12,000 at 53c costs $4,880, an average of 48.8c against a best ask of 47c. Slippage is 1.8c per contract, or 3.7% of the money spent.

Used in Reading order books, Low-liquidity markets, What is Polymarket

makeradds liquidity#

A trader whose order rests in the book and waits, adding depth rather than removing it, and on Polymarket a maker pays a verified zero fee.

Why it costs money. This single distinction decides whether a marginal edge is profit or loss. Polymarket charges makers nothing. Kalshi's maker rate is unresolved, so we assume 0.0175, a quarter of its taker rate. Any fee estimate that does not say which side you are on is not an estimate.

Worked example, illustrativeSame trade, 200 contracts at 50c. On Polymarket a taker in a politics market pays $2.00 and a maker pays $0.00. On Kalshi a taker pays $3.50 and a maker pays $0.88 after the round-up.

Used in Reading order books, Comparing venues, Polymarket fee calculator

takerremoves liquidity#

A trader who crosses the spread and fills against an order already resting in the book, and the only side either venue charges a full fee to.

Why it costs money. Every cross-venue arbitrage that has to execute now is a taker trade on both legs, so it pays two taker fees and two half-spreads. That is four costs, and the gross spread has to clear all of them.

Worked example, illustrativeBoth legs near even money: Polymarket politics at 49c costs 1.00c per contract and Kalshi at 49.5c costs 1.75c per contract. Total 2.75c per share pair, so a gross spread of 1.5c is a loss of 1.25c a pair.

Used in Comparing venues, Kalshi fee calculator

resting ordersitting in the book#

A limit order sitting unfilled in the book, which is what makes you a maker rather than a taker.

Why it costs money. Resting is free on Polymarket and cheap on Kalshi, but it is not costless: you are giving anyone who knows more than you a free option to trade against your price until you cancel.

Worked example, illustrativeA bid resting at 46c while the market is 46 bid, 50 ask earns you a 2c half-spread when a seller crosses to you, and loses far more than 2c when the seller crosses to you because news has broken. See adverse selection.

Used in Reading order books

limit orderprice you choose#

An order carrying the worst price you will accept, which may sit unfilled forever rather than fill at a price you did not choose.

Why it costs money. A limit order converts a certain cost into an uncertain one. You stop paying slippage and start paying the risk of no fill, which on a two-leg trade is the expensive version.

Worked example, illustrativeA limit at 47c on a book whose best ask is 47c with only 5,000 resting will fill 5,000 and leave the rest open. On a paired trade the unfilled remainder is exactly the exposure you were trying not to have.

Used in Reading order books, What is Polymarket, Kalshi for non-US traders

market orderfill now, any price#

An order to fill immediately at whatever the book is showing, which always makes you a taker and always accepts whatever slippage the book contains.

Why it costs money. You are agreeing in advance to an unknown average price. On a deep book that costs a fraction of a cent. On a thin one it is the single most expensive button on the page.

Worked example, illustrativeThe same 10,000 contract order costs 47.0c average on a book with 40,000 resting at the top level and 48.8c on the three-level book above. Same button, $180 difference.

Used in Reading order books, What is Polymarket

fill haircutcommunity usage#

The money lost between the quote you decided on and the average price you actually got, which is slippage counted from your own decision rather than from the top of the book.

Why it costs money. It is the honest measure, because it includes the price moving while you were deciding. Measuring from the top of the book at execution time flatters every backtest ever written.

Worked example, illustrativeYou decide at 47c, the book moves to 48c while you confirm, and you average 49.2c. Slippage from the book is 1.2c. The haircut from your decision is 2.2c, which is the number that actually came out of your account.

Used in no guide on this site uses this term yet.

quote lagcommunity usage#

The gap between the price a venue's public feed is showing and the price its book will actually fill at right now.

Why it costs money. Every cross-venue signal is computed from two feeds with two different lags. The apparent edge is partly a measurement artefact, and the artefact is not symmetric: stale quotes flatter the opportunity more often than they hide it.

Worked example, illustrativeA pair quoted at 0.985 combined shows a gross spread of 1.5c. If one leg's true ask has already moved a cent, the real gross is 0.5c, against a two-leg taker cost near even money of 2.75c. The trade was never there.

Used in no guide on this site uses this term yet.

adverse selectioncommunity usage#

The tendency for your resting orders to be filled precisely by the traders who know something you do not.

Why it costs money. It is the reason collecting the half-spread is not free money. Your fills are not a random sample of the market: they are selected for being the trades somebody else wanted.

Worked example, illustrativeAt a 2c half-spread, four uninformed fills earn 8c and one informed fill that moves 6c against you loses 6c, netting +0.4c per fill. Raise the informed share to one fill in four and the whole edge is zero. Market making dies at a rate, not at a price.

Used in no guide on this site uses this term yet.

inventory riskcommunity usage#

The risk carried while holding a position you took on in order to provide liquidity rather than because you wanted the exposure.

Why it costs money. A maker's profit is a stream of small half-spreads and its loss is an occasional large directional move on stock it never wanted. The two are not the same size.

Worked example, illustrativeHolding 10,000 contracts bought at 48c is $4,800 of exposure. A move to 44c is a $400 unrealised loss, which is 200 filled trades at a 2c half-spread on 100 contracts each.

Used in Risk framework

one-legged fillthe dangerous case#

A two-leg trade where only one leg filled, leaving a directional bet you never intended to hold.

Why it costs money. A paired position risks the spread. An unpaired one risks the whole stake. This is the failure that turns a small-edge strategy into a large-loss strategy in one execution.

Worked example, illustrativeYou intend to pay 49c for YES on one venue and 49.5c for NO on the other, risking 1.5c a pair. Only the first leg fills on 10,000 contracts. You now hold $4,900 on one outcome, and the downside is not 1.5c, it is $4,900.

Used in Risk framework, Reading order books

CLOBcentral limit order book#

Central limit order book, the matching model both venues use, in which traders quote to each other rather than against a formula.

Why it costs money. It is the reason the two sides of a market can sum to less than a dollar, which is what makes arbitrage possible at all. A venue pricing off a formula cannot produce that gap.

Worked example, illustrativeYES at 48c and NO at 50c sum to 98c. Buying both pays $1.00 at resolution for 98c now, a gross 2c per pair. Fees decide whether that is a trade.

Used in Reading order books, The API, for developers, Bot setup

picking pennies on an active railroad trackcommunity usage#

The market's own description of collecting a small reliable edge in a position whose rare failure is far larger than the edge.

Why it costs money. It names the shape of the risk rather than its size, which is the part a win rate hides. A strategy can be right nine times in ten and still lose money if the tenth outcome is twenty times the size of the other nine.

Worked example, illustrativeNine wins at +1.5c a pair is +13.5c. One divergent resolution on the same size is -100c. Net over ten trades: -86.5c, on a 90% win rate.

Used in Risk framework

Fees, and the arithmetic that decides everything

Fourteen terms. The coefficients in every worked number below come from each venue's published schedule, with the date each was checked listed in sources.

vigalso: vigorish, juice, overround#

A sportsbook's margin, built into the quoted price on both sides so the two implied probabilities add up to more than 100 percent. Neither Polymarket nor Kalshi charges one, and calling their fees a vig gets the arithmetic wrong in both directions.

Why it costs money. A vig is invisible and unavoidable: it is the price, so patience cannot dodge it and no line item discloses it. A venue fee is visible, formulaic, and on Polymarket it is zero if you rest an order instead of crossing. Treating the two as the same thing means you overstate the cost of a patient maker and understate the cost of a taker in a cheap contract.

What a real vig looks likeA sportsbook prices both sides of a coin flip at -110. Each side implies 110 / 210 = 52.38%, so the two sum to 104.76%. That 4.76 point overround means a balanced book keeps 4.76 / 104.76 = 4.55% of everything staked, at every price, forever.

What these venues charge instead, illustrativePrices come from other traders, so the two sides can sum to 100c or below. The venue adds an explicit fee on top: fee = C × rate × P × (1 - P). Because C = stake / P, that is rate × (1 - P) of your stake. On a Polymarket politics market at 50c a taker pays 2.00%; at 90c, 0.40%; at 10c, 3.60%. A Polymarket maker pays 0.00% at every one of those prices. A Kalshi taker at 50c pays 3.50% and a Kalshi maker 0.88%.

So the honest comparison is a curve against a constant. A sportsbook's 4.55% does not move. Setting the taker cost equal to it and solving for the price gives the crossover: on a 4% category it never crosses at all, since 4% is the ceiling; on a 5% category it crosses only below about 9c; on a 7% category, and on Kalshi at its 7% taker rate, it crosses below about 35c. Above those prices these venues are cheaper than the sportsbook, and a maker on Polymarket is cheaper everywhere because zero is cheaper than everything. There is no single number here, and any page that gives you one is wrong before it starts.

Used in Polymarket fee calculator, Kalshi fee calculator, Comparing venues

rakeborrowed from poker#

The cut a venue takes out of a trade, and a poor fit for a fee that varies with price rather than sitting at a flat percentage.

Why it costs money. Poker rake is capped per pot, which makes small pots expensive and large ones cheap. These fees are capped by nothing and scale linearly with size, so the intuition transfers backwards.

Worked example, illustrativeDoubling your size on Polymarket exactly doubles the fee: 200 contracts at 50c on a 4% market costs $2.00, and 400 costs $4.00. There is no cap to grow into.

Used in no guide on this site uses this term yet.

house edgegambling vocabulary#

The structural advantage a gambling operator holds because it sets the price, which is absent on an exchange where the price comes from other traders.

Why it costs money. On a house game your expected loss is a property of the game and cannot be traded away. On an exchange your expected loss is a property of your own decisions plus explicit costs, which is a different problem with a different solution.

Worked example, illustrativeRoulette's house edge is set by the wheel. An exchange has no wheel: two traders at 48c and 52c on opposite sides of the same contract have a combined expected value of exactly the fees they paid.

Used in Is Kalshi gambling

fee ratethe coefficient#

The coefficient in a venue's fee formula, which on Polymarket varies by market category and is published per market in its API.

Why it costs money. Using the wrong coefficient invalidates every downstream number silently. There is no error message for a fee computed at the wrong rate, only a strategy that quietly does not work.

Verified ratesPolymarket, per category: crypto 7%, sports, economics, culture, weather and other 5%, finance, politics, tech and mentions 4%, geopolitical 0%. Kalshi: taker 7%, maker 1.75%, index contracts 3.5%. Read across 600 Polymarket markets on 31 July 2026, the live per-market schedule showed 0.05 on 295, 0.04 on 132, 0.07 on 82, and fees disabled on 91.

Used in Polymarket fee calculator, Kalshi fee calculator

round upthe Kalshi rounding rule#

Kalshi's published rule that a computed fee is rounded up to the next whole cent for the whole trade, which costs the most on small positions in cheap contracts.

Why it costs money. Counterintuitively, the cheapest contracts are where rounding eats the largest share of a small position. The contract count sits inside the ceiling, so rounding applies once per trade rather than per contract, and the penalty therefore shrinks as you size up.

Worked example, illustrativeOne contract at 20c: the raw fee is 0.07 × 1 × 0.20 × 0.80 = 1.12c, rounded up to 2c, which is 10% of a 20c stake instead of 5.6%. The same trade at 100 contracts computes $1.12 and rounds to nothing extra, so it costs 5.6%. The venue's own published table lists that one-contract case at exactly 2c.

Used in Kalshi fee calculator

break-eventhe parabola#

The move a trade needs before it covers its own fees, which as a fraction of stake equals the fee rate multiplied by one minus the entry price.

Why it costs money. It is the number a flat percentage threshold cannot express. Two trades showing an identical edge can sit on opposite sides of viability purely because of where their prices are, and a single cutoff cannot tell them apart.

Worked example, illustrativeOn a 5% category, an entry at 90c needs 0.50% and an entry at 30c needs 3.50%. An edge of 1.20% is comfortable at the first and impossible at the second. Same edge, same venue, same fee rate.

Used in Polymarket fee calculator, Risk framework

edgebefore costs#

The gap between the price and what you believe the true probability is, measured before any cost is taken off.

Why it costs money. Quoting an edge without saying whether it is gross or net is the most common way a strategy is oversold, including to yourself. Gross edge is an opinion. Net edge is a number.

Worked example, illustrativeYou think a 37c contract is really a 40% chance, so the gross edge is 3c. On a 5% category the taker fee at 37c is 3.15% of stake, about 1.17c per contract, so the net is closer to 1.8c.

Used in Risk framework, Low-liquidity markets

net edgeafter both legs' fees#

What survives of the edge once both legs' fees are subtracted, which is the only version of the number worth quoting.

Why it costs money. On a two-leg trade the fees are computed at two different prices on two different schedules, so the net edge is not the gross minus a constant. It has to be computed per pair.

Worked example, illustrativeSame gross spread of 1.5c, two different price pairs. Near even money, 49c and 49.5c: fees 1.00c plus 1.75c, net -1.25c. At the longshot end, 8c and 90.5c: fees 0.29c plus 0.61c, net +0.60c. Identical headline, opposite outcome.

Used in The arbitrage scanner, Polymarket fee calculator

price bandA, B, C#

A label for where the cheaper leg of a trade sits on the price scale, used because an identical spread is comfortable in one band and a loss in another.

Why it costs money. Storing a spread without both leg prices makes the record uninterpretable later. The band travels with the record so a two cent spread can still be read correctly a month afterwards.

The bands we useBand A below 15c, the longshot corner. Band B from 15c to 35c. Band C at 35c and above, near even money. Break-even climbs across them, so the same spread that clears comfortably in band A is negative in band C.

Used in The arbitrage scanner, Methodology

half rateKalshi index contracts#

Kalshi's published half-price fee coefficient of 0.035 for its S&P 500 and Nasdaq-100 index contracts.

Why it costs money. It halves the break-even on an entire product line, which changes which index trades are worth doing. Applying the 7% rate to an index ticker overstates its cost by a factor of two.

Worked example, illustrativeAt 50c the standard taker cost is 3.50% of stake. On an index contract it is 1.75%. On $1,000 that is $35 against $17.50.

Used in Kalshi fee calculator

cross-venue arbitragetwo venues, one question#

Buying the YES side on one venue and the NO side on the other when the two prices add up to less than a dollar, so the pair pays a dollar whichever way it resolves.

Why it costs money. The gross spread is the easy part. Two taker fees, two half-spreads, the risk of a one-legged fill and the risk of divergent resolution all come out of it, and the last of those is not priced in cents.

Worked example, illustrativeYES at 49c plus NO at 49.5c is 98.5c for a dollar, a gross 1.5c. Two taker fees at those prices come to 2.75c. The trade loses 1.25c a pair before a single thing goes wrong.

Used in The arbitrage scanner, Comparing venues

mark to marketunrealised, not settled#

Revaluing an open position at the current market price, which moves your paper profit without anything having settled.

Why it costs money. A mark is a quote, not cash. On a thin book the mark can be a price at which you could not sell a tenth of your position, so a portfolio marked at midpoint is systematically optimistic.

Worked example, illustrative200 contracts bought at 50c cost $100. A midpoint of 57c marks them at $114, an unrealised +$14. If the best bid is 52c, the realisable figure is $104, so $10 of that gain does not exist yet.

Used in Risk framework, Methodology

implied probabilitythe price, read as a percentage#

The probability a price implies, which on a binary contract is the price itself read as a percentage, before fees are added.

Why it costs money. The fee moves your true break-even probability above the quoted one. Comparing your forecast to the screen price rather than to the fee-inclusive price means you take trades with no edge and believe they had one.

Worked example, illustrativeA 37c contract looks like a 37% chance. On a 5% category the taker fee is 1.17c per contract, so you actually pay 38.17c and need the true probability above 38.2% to profit.

Used in What is Polymarket, Kalshi for non-US traders

log-odds spacecommunity usage#

Thinking about price moves as changes in odds rather than in cents, because two cents means far more at four cents than it does at fifty.

Why it costs money. A cent-based alert threshold fires constantly on near-even markets and almost never on longshots, where the genuinely large information changes happen. The threshold is measuring the wrong thing.

Worked example, illustrativeMoving 4c to 6c takes the odds from 0.0417 to 0.0638, a 53% increase. Moving 50c to 52c takes them from 1.000 to 1.083, an 8% increase. Same two cents, seven times the information.

Used in no guide on this site uses this term yet.

Resolution, and what the rulebook actually says

Twelve terms. This is the group where the losses are largest and the vocabulary is least documented, because the words live in market rules that most people never open.

event contractthe regulated name#

The regulated name for the instrument: a contract paying one dollar if a stated event happens and nothing if it does not.

Why it costs money. The name matters because it is the term regulators, tax authorities and the venues' own rulebooks use. Searching for bets and tips will never find the document that decides whether you get paid.

Worked example, illustrativeTwo contracts on opposite sides of the same event always sum to $1.00 at resolution. That identity is what makes 98c for the pair an arbitrage and 101c a guaranteed loss.

Used in Is Kalshi gambling, What is Polymarket

resolutionalso: settlement#

The moment a venue declares an outcome and pays the winning side a dollar per contract.

Why it costs money. Until resolution your gain is a mark, not money, and your capital is locked. Capital sitting in a position for three months earns nothing while it waits, which is a real cost that appears in no fee schedule.

Worked example, illustrativeA pair bought at 98c returns $1.00 at resolution, a gross 2%. If resolution is six months away, that is roughly 4% annualised before fees, which is the number to compare against leaving the money somewhere safe.

Used in What is Polymarket, Low-liquidity markets

resolution sourcealso: settlement source#

The specific document, feed or authority a market's rules name as the thing that decides the outcome.

Why it costs money. On a cross-venue trade this is the dominant risk, not the spread. Two markets can carry the same headline and name two different sources, which means they are two different contracts wearing the same title.

Worked example, illustrativeIf one venue resolves from an official agency release and the other from a media call, a pair bought at 98c for a 2c gross gain can pay $0.00 on both legs. The downside is not 2c, it is the full 98c.

Used in Low-liquidity markets, Kalshi for non-US traders

resolution riskthe written criteria risk#

The risk that the written criteria produce an outcome different from the one you thought you were trading.

Why it costs money. It is uncorrelated with everything a screen can measure. Volume, depth and spread tell you nothing about it. A deep, liquid, heavily traded market can still resolve on a clause you never read.

Worked example, illustrativeSizing rules that assume the worst case is the spread will size a cross-venue pair at 65 times its 1.5c gross edge. If the real worst case is losing the stake, the same position is 65 times too large.

Used in Low-liquidity markets, Risk framework

rulebookthe actual contract#

The written terms of a specific market, which are the contract, and which override anything the market's headline suggests.

Why it costs money. Reading it takes about two minutes and it is the only document that can pay you or refuse to. Kalshi files its contract rules with the CFTC, so they can be read outside the app.

What to look forThe named resolution source, the exact settlement date and time zone, what happens on ambiguity, what happens on a void, and any carveout that excludes an otherwise obvious outcome. On a two-leg trade, read both.

Used in Low-liquidity markets, Methodology

death carveoutcommunity usage#

The market's name for an exclusion buried in resolution criteria that changes what counts as the event having happened.

Why it costs money. A carveout is invisible on the tile, on the chart and in every API field a scanner reads. It only exists in the prose, which is why it is the failure mode that most reliably surprises people who trade from a screen.

Where the phrase comes fromIt was named after a widely argued case in which traders said a market settled against the apparent real-world outcome because of a carveout they believed was not visible when they entered. We have not independently verified that account, so treat it as the market's report rather than ours. The vocabulary is the durable part: carveouts exist, they are in the prose, and they decide payment.

Used in no guide on this site uses this term yet.

dead bracketscommunity usage#

In a market split into numeric brackets, the brackets the underlying can no longer plausibly reach but which still carry live quotes at a cent or two.

Why it costs money. They look like free money and they are where the fee arithmetic is most brutal, because a fee rounded up to a whole cent against a two cent stake is an enormous percentage. This is the single clearest case of why a flat fee percentage misleads.

Worked example, illustrativeOne Kalshi contract at 2c: the raw taker fee is 0.07 × 0.02 × 0.98 = 0.137c, which rounds up to 1c. That is 50% of the 2c you staked. At 100 contracts the same trade computes 13.7c, rounds to 14c, and costs 7%. On Polymarket at 2c on a 4% category the cost is 3.92% with no rounding.

Used in no guide on this site uses this term yet.

voidedcancelled, not resolved#

A market cancelled rather than resolved, where positions are unwound instead of paid out.

Why it costs money. A void is not neutral on a paired trade. One leg disappearing leaves the other leg naked, which converts a hedged position into a directional one without you doing anything.

Worked example, illustrativeYou hold YES at 49c on one venue and NO at 49.5c on the other. The second venue voids and returns your 49.5c. You are now holding a 49c outright position on an outcome you had deliberately neutralised.

Used in Risk framework

cost basis returnedcommunity usage#

What happens to you on a void: you get back what you paid, which is neither a win nor a loss but does leave any paired position naked.

Why it costs money. The fee you paid to open is not returned with it, and the capital was locked for the whole period. A void is a small guaranteed loss plus a new unhedged exposure, which is worse than it sounds.

Worked example, illustrativeA voided Kalshi leg of 100 contracts opened at 49.5c returns $49.50. The opening taker fee of about $1.75 stays gone, so the round trip on that leg is -$1.75 before you deal with the surviving leg.

Used in no guide on this site uses this term yet.

divergent resolutionthe both-legs case#

Two venues resolving the same real-world question differently, which is the one failure that can lose both legs of a cross-venue trade at once.

Why it costs money. It is often confused with a void. A void costs you the fee and leaves you exposed. Divergent resolution costs you the whole pair, which is the only outcome where the loss exceeds the capital at risk in every other scenario combined.

Worked example, illustrativeA pair bought for 98.5c to win 1.5c. If venue A resolves NO and venue B resolves YES on the same question, both of your legs are the losing side and the pair pays $0.00. One such outcome erases 65 successful pairs.

Used in Risk framework, The arbitrage scanner

optimistic oraclePolymarket resolution#

A resolution mechanism in which a proposed outcome stands unless somebody disputes it inside a stated window, which is how Polymarket markets are settled.

Why it costs money. Silence resolves the market. If a proposed outcome is wrong and nobody with a position notices in time, it settles wrong, and the remedy is a dispute process rather than an appeal to the venue.

Worked example, illustrativeTwo contracts that should each be worth $1.00 and $0.00 can settle the other way round if a proposal goes unchallenged. The cost of not watching the window is the entire position.

Used in Comparing venues, Low-liquidity markets

mention marketscommunity usage#

Markets on whether a named person says a named word inside a window, resolved from a transcript rather than from an outcome.

Why it costs money. The resolution turns on transcript wording, so the interesting risk is textual rather than predictive. They also carry their own Polymarket fee category, at the 4% rate.

Worked example, illustrativeA mention contract at 25c carries a taker break-even of 0.04 × 0.75 = 3.00% of stake, so a $400 position pays about $12 in fees. The forecast has to beat that plus the spread.

Used in Polymarket fee calculator

Money, custody and access

Eleven terms about where the money sits, who is holding it, and whether you are allowed to trade at all.

contractalso: share#

One unit of a market, which pays one dollar if its side wins and zero if it does not, and the unit every fee formula is written in.

Why it costs money. Fees are quoted per contract while you think in pounds or dollars, and the conversion is where most fee arithmetic goes wrong. The number of contracts a fixed stake buys rises as the price falls, which is exactly why cheap contracts carry more fee per pound staked.

Worked example, illustrative$100 buys 200 contracts at 50c but 1,000 contracts at 10c. At a 4% rate the fee is $2.00 on the first and $3.60 on the second, from the same $100.

Used in What is Polymarket, Polymarket fee calculator

fully collateralisedcommunity usage#

Every contract is backed by a full dollar already held in the system, so the winning side is paid from money that exists rather than from the venue's balance sheet.

Why it costs money. It removes the question of whether the venue can pay and leaves the question of whether it will resolve your way. Those are different risks and collateralisation only answers the first.

Worked example, illustrativeFor every contract, someone paid P and someone paid 1 - P, so $1.00 is already deposited per contract outstanding. There is no leverage in the structure and no margin call to receive.

Used in Where your money sits

cash-settledcommunity usage#

The contract pays money at resolution, with nothing delivered and nothing to hold afterwards.

Why it costs money. There is no asset to keep, so every position has a hard end date and every return has to be earned inside it. Time is not on your side the way it can be with something you own.

Worked example, illustrativeA contract bought at 60c that resolves YES pays exactly $1.00 and then ceases to exist. There is no version of the trade where you hold on and wait for a better price after resolution.

Used in Where your money sits

segregated fundsnot: insured#

Customer money held in an account separate from the operator's own money, which is a rule about where the money sits and not a promise that you get it back.

Why it costs money. Segregated is routinely read as insured. It is not the same claim. Neither deposit insurance nor investor compensation schemes cover an event contract position, and no amount of segregation changes that.

The distinctionSegregation is a statement about bookkeeping: your balance is not the operator's working capital. Insurance is a statement about a third party who pays you if the balance is not there. Only the first of those exists here.

Used in Where your money sits, Kalshi for non-US traders

USDCPolymarket collateral#

The dollar-referenced stablecoin that collateralises Polymarket positions, so the position is denominated in a token rather than in bank dollars.

Why it costs money. It adds a layer between you and a dollar: the token's issuer, the chain it sits on, and the cost of converting in and out. None of those costs appear in the venue's fee schedule.

Worked example, illustrativeA 2c gross arbitrage on a $500 pair is $10. If getting the money in and back out costs $12 in conversion and network fees, the trade is negative before the venue charges anything.

Used in Wallet setup, What is Polymarket, Where your money sits

Polygonthe settlement chain#

The chain Polymarket settles on, and the source of the gas and bridging costs that appear in no fee schedule.

Why it costs money. Every deposit, withdrawal and approval is a chain transaction with its own cost and its own failure modes. A wallet mistake here is not recoverable by contacting support.

Worked example, illustrativeNetwork costs are small per transaction but fixed per transaction, so they scale badly downwards. A strategy of many small positions pays them many times; one large position pays once.

Used in Wallet setup, Where your money sits

DCMdesignated contract market#

Designated contract market, the CFTC category Kalshi holds, which is why its contract rules are filed with a federal regulator and can be read.

Why it costs money. It is the practical difference between a rulebook you can read before trading and one you cannot. The fee coefficients on this page were checked against a 2022 CFTC rule filing precisely because that filing exists and a help page can be edited without notice.

Why that matters for arithmeticThe 0.07 taker coefficient appears in the September 2022 CFTC rule filing and in two later editions of the published fee schedule. A coefficient that has held across three independent documents is a coefficient you can build on.

Used in Is Kalshi gambling, Where your money sits

KYCknow your customer#

Know your customer, the identity checks a venue runs, and the most common stated reason a withdrawal is held.

Why it costs money. A hold does not reduce your balance, it removes your access to it, which for anyone running paired positions across two venues breaks the strategy rather than just delaying it.

What the complaint record showsWithdrawal timing and identity holds are the dominant one-star theme on both Trustpilot and the Better Business Bureau file. Reading that BBB file for Kalshi in late July 2026, 174 of 214 complaints were recorded as unanswered.

Used in Kalshi for non-US traders, Wallet setup

close-onlygeoblock status#

A jurisdiction where a venue permits existing positions to be closed but no new positions to be opened.

Why it costs money. It is not the same as blocked, and the difference matters for anything two-legged: you cannot open the leg you need, only unwind what you already hold. Polymarket's published geoblock list, read on 5 August 2026, has the United States and the United Kingdom in the close-only set on both the front end and the API.

Worked example, illustrativeA cross-venue pair needs a new position on both venues at the same time. In a close-only jurisdiction that trade has a 0% availability rate regardless of how good the spread looks on a screen.

Used in Kalshi for non-US traders, Where your money sits

position limitscommunity usage#

A published cap on how many contracts one account may hold in a single market, which sets the ceiling on any strategy that needs size.

Why it costs money. It caps the absolute return of a small-edge strategy independently of how much capital you have. A 1.5c edge is only ever worth 1.5c times the limit, minus everything else.

How to read itThe limit is published per contract in the venue's own market rules, so it is a number to look up rather than estimate. We are not quoting one here, because a stale limit is worse than no limit.

Used in Low-liquidity markets, Risk framework

on-ramp and off-rampcommunity usage#

Getting money in and out of a venue, and the costs of doing so, which appear in neither venue's fee schedule.

Why it costs money. These costs are fixed per movement rather than proportional to the trade, so they punish exactly the pattern a small-edge strategy produces: many small round trips.

Worked example, illustrativeA strategy averaging 2c gross per $100 pair earns $2 a pair. A round trip costing $8 in ramps needs 4 pairs just to pay for the money's journey to the venue and back.

Used in Wallet setup, Kalshi for non-US traders

How the market talks about bad behaviour

Nine terms. This register is used inside the market as criticism, and several of these words will tell you more about a source than its disclosure page does.

vibes tradingcommunity usage, pejorative#

Taking a position on how a story feels rather than on a priced-out estimate, used inside the market as criticism rather than as description.

Why it costs money. A position with no number behind it has no break-even to compare against, so you cannot tell afterwards whether it was a good decision that lost or a bad decision that won.

The testBefore entering, write down the probability you think is correct and the fee-inclusive price you are paying. If you cannot produce the first number, the trade has no measurable edge, whatever it returns.

Used in Risk framework

whalescommunity usage#

Accounts large enough that their own orders move a market, which on a thin book is a much smaller account than most people assume.

Why it costs money. Following a large order into a thin book means buying what somebody else has already repriced. You get the position at the new price and they hold it at the old one.

Worked example, illustrativeOn a book with 5,000 resting at the best level, an order for 6,000 clears the level and sets a new price. That is a whale on that market, at a stake of a few thousand dollars.

Used in The API, for developers, Bot setup

front-runningcommunity usage#

Trading ahead of an order you can see, so that order pushes the price into your position.

Why it costs money. On a public book a large resting order is visible to everybody, which makes patience expensive in a different way: your intention is information you are giving away for free.

Worked example, illustrativeResting a bid for 20,000 contracts tells the market that a large buyer exists at that price. Splitting it into smaller orders costs more in fixed costs but stops advertising the size.

Used in Risk framework

wash tradingcommunity usage#

Trading with yourself to manufacture volume that looks like genuine interest, which defeats any screen built on a volume threshold.

Why it costs money. Volume is the most common liquidity proxy and the easiest one to fake. A market can clear a volume filter and still have nothing resting in the book when you arrive.

The better screenUse resting depth at the levels you intend to trade, not cumulative volume. Depth is what fills you. Volume is a history of things that already happened, some of which may not have been real.

Used in Methodology

spoofingcommunity usage#

Placing orders you intend to cancel so the book looks deeper than it is, which turns measured depth into a number you cannot trade against.

Why it costs money. It attacks the one metric that is supposed to be reliable. If the depth you sized against disappears as you cross, your average fill is set by the levels behind it.

Worked example, illustrativeA book advertising 10,000 at 47c that actually fills 1,000 there and the rest at 53c turns a planned 47.0c average into 52.4c, a 5.4c haircut.

Used in Reading order books

sanewashingcommunity usage, pejorative#

Restating something reckless in reasonable language until it reads as analysis.

Why it costs money. It is a reading skill rather than a trading cost. The tell is usually a confident conclusion with no arithmetic anywhere near it, or a percentage with no formula behind it.

No arithmetic hereThis entry has no worked number because none is possible. The check is structural: ask what figure the claim rests on, where that figure came from, and on what date it was read.

Used in no guide on this site uses this term yet.

longshot biasalso: the longshot corner#

The tendency for cheap contracts to trade above their true chance of happening, which the fee parabola then compounds because cheap contracts carry the highest fee as a share of stake.

Why it costs money. Two costs point the same way in the same place. The price is already too high and the fee is at its worst relative to stake, so the cheapest part of the board is the most expensive to be wrong in.

Worked example, illustrativeA 5c contract on a 5% category carries a taker fee of 0.24c per contract, so you really pay 5.24c and need a true probability above 5.24%. A five percent contract needs to be nearly five and a quarter percent likely just to break even.

Used in Low-liquidity markets

spec driftdeveloper register#

An API's documented behaviour and its real behaviour diverging, so code built on the documentation prices things wrong without erroring.

Why it costs money. A wrong coefficient produces no exception, no warning and no failed test. It produces a strategy that quietly takes trades it should refuse, for as long as nobody re-reads the source.

A documented caseA competitor published a Polymarket taker formula using a coefficient of 0.0625 for about five months. Polymarket does not use 0.0625. Every threshold computed from it was wrong, and nothing on the page cited a source that could have caught the drift. That is why every coefficient in our fee code carries its citation and the date it was checked.

Used in The API, for developers, Bot setup

paper tradingmethod#

Recording the trade you would have made, at the prices quoted at the time, without putting money in.

Why it costs money. Done badly it costs you the illusion of a tested strategy. A paper record that marks entries at the top of the book, skips the fee, ignores the fill haircut and quietly drops trades that could not have filled will outperform any live account, because it is measuring a different game.

What we record, and no figuresBoth legs' quoted prices at decision time, the resting depth at those prices, the fee computed from the coefficient schedule with its version stamped onto the record, the price band of the cheaper leg, and the outcome at resolution. No number from our own log appears on this page. The collector is being rebuilt, and a figure taken from it now would not be reliable enough to publish.

Used in Methodology, Risk framework

Where the numbers on this page came from

Every fee coefficient above comes from one of the documents below, each read on the date given. No coefficient on this page was taken from a competitor page, a summary, or memory. Where a claim is the market's own report rather than something we read at source, the entry says so in the entry itself.

Polymarket fee documentationdocs.polymarket.com/trading/fees. The taker formula and the per-category rates. Read 29 July 2026.
Polymarket Gamma API, per-market fee scheduleObserved across 600 markets on 31 July 2026: rate 0.05 on 295, 0.04 on 132, 0.07 on 82, and fees disabled on 91, with taker-only true on every one, which independently confirms that makers pay zero.
Kalshi fee schedulekalshi.com/docs/kalshi-fee-schedule.pdf. The taker and maker coefficients, the round-up rule and the index half rate. Read 30 July 2026 against three editions: February 2026, October 2025, and the September 2022 CFTC rule filing.
CFTC rule filing, September 2022rule091222kexdcm003.pdf. The primary regulatory document carrying the 0.07 taker coefficient, which is why we treat it as stable rather than as a help-page figure.
Polymarket geoblock endpointdocs.polymarket.com/api-reference/geoblock. The close-only jurisdiction list. Read 5 August 2026. The page itself carries no date or version, so ours is the only date available.
Better Business Bureau complaint file for KalshiRead in late July 2026: 174 of 214 complaints recorded as unanswered, with withdrawal timing and identity holds the dominant one-star theme there and on Trustpilot.

Every worked number on this page is illustrative arithmetic, computed from the formulas in those documents so that a reader can check it with a calculator. None of it is a record of trades, ours or anyone else's. Where the arithmetic is ours rather than the venue's, it is derived from the published formula and nothing else: the venues do not publish break-even tables.

Disclosure

This site is free to use, with no sign-up and no paywall. On the scanner page, the Polymarket buttons carry a referral code, so Polymarket pays us if a reader opens an account through one. That changes nothing about which candidates the scanner finds or how it ranks them, and the Kalshi buttons pay nothing. There is no referral link anywhere on this page. Nothing here is financial advice, and prediction markets are not legal everywhere.

The fee calculators
The same arithmetic, per trade, with the coefficients and their sources shown. Polymarket and Kalshi.
Reading order books
Most of the first group above, in one guide, with screenshots. Read the guide.

This page is built to grow. Entries are grouped rather than alphabetised, each carries a stable anchor, and a new term can be appended to its group without touching anything else. If a term you met on this site is missing here, it is a gap in this page rather than in the vocabulary.