Prediction Market EV Calculator

How This Differs from a Regular EV Calculator

A standard EV calculator takes decimal or American odds, a stake, and a true probability. It outputs the expected dollar return on one wager. That formula assumes a sportsbook-style payout where your stake is at risk and win pays stake * (odds - 1).

Prediction markets work differently. You buy a binary contract at a cents price between 1 and 99. If your side wins, the contract settles at 100 cents (a $1 payout). If it loses, it settles at 0. So the payout on a win is (100 - price) cents of profit per contract, and the loss is the price itself. No stake multiplication.

This changes three things:

• Input format. You enter cents and percent, not decimal odds.
• EV formula. It's p * (1 - price) - (1 - p) * price, not p * stake * (odds - 1) - (1 - p) * stake.
• Fee structure. Kalshi and Polymarket charge fees in specific formulas (percentage of price * (1 - price) for Kalshi, flat gas for Polymarket) that regular EV calcs don't model.

Kalshi Fees in the Formula

Kalshi's fee is a piecewise function that peaks around the 50 cent mark. For the default 7% tier, it's approximately 0.07 * price * (1 - price) per contract, which caps at $0.0175 at 50 cents and scales toward zero at the edges (1 cent or 99 cent contracts).

That approximation is baked into the EV calculation above. If you're on a lower tier (1% or 2%), adjust the fee tier input and the output updates. Kalshi posts their current fee schedule in their trading interface.

Polymarket Gas in the Formula

Polymarket runs on Polygon L2 with no trading fee. You pay Polygon gas per trade, typically $0.05 to $0.20 depending on network load. This is a flat cost per transaction, not per contract.

For small positions (under 50 contracts), gas can shrink or erase edge. For larger positions, it's trivial. The calculator divides gas across your contract count so per-contract EV reflects the true amortized cost.

Why Prediction Market EV Beats Sportsbook EV

Three structural advantages make prediction markets more scalable than sportsbooks for +EV play:

1. No limits. Kalshi and Polymarket don't limit winners. A sharp sportsbook like FanDuel or DraftKings will cap your stake or close your account once you show a profit. On Kalshi, your only constraint is market depth.
2. No gubbing. Sportsbook bonus accounts get restricted if you only bet +EV lines. Prediction markets don't care how often you win. Your account stays open forever.
3. Tighter pricing on niche markets. Politics, macro, and entertainment markets on Kalshi are often mispriced because not enough sharp capital flows in. Devigged Pinnacle or consensus forecasts can find 5 to 15% edges on contracts that would have 1% edges on a sharp sportsbook.

The combination means you can scale a strategy that works on prediction markets to the full size your bankroll supports. On sportsbooks, you're rate-limited by account availability. See Kalshi value betting for the long version.

Using Sharp Devigged Odds as Your P_true

The quality of your EV calculation depends entirely on the quality of your P_true input. The sharpest public probability estimate comes from devigging Pinnacle or PS3838. Use the Kalshi fair odds calculator to convert Pinnacle's two-way odds into a fair probability, then paste that number into this EV calculator.

Workflow:

1. Open the Pinnacle line on your matched sports market (tennis, NBA moneyline, NFL spread).
2. Run both sides through the fair odds calculator. Use Proportional for balanced markets, Shin for heavy favorites.
3. Take the fair probability for your side (say, 55.3%) and paste it as P_true here.
4. Enter the Kalshi price and contract count. The calculator outputs EV, ROI, and Kelly stake.
5. If ROI is above 3% and Kelly is positive, it's a trade worth taking.

Frequently Asked Questions

How do I estimate true probability for binary contracts?

The sharpest public source is Pinnacle or PS3838. Take the two-way odds from their market, devig using Proportional or Shin, and convert the output to a percentage. That becomes your P_true input for this calculator. For markets without a direct Pinnacle equivalent (weather, macro, politics), use consensus forecasts from sources like 538 or Metaculus as your estimate, then weight by confidence. A good rule of thumb: only bet when your P_true is sourced from data sharper than the Kalshi market maker's.

What's a good EV threshold for prediction market betting?

For automated live trading, 3% ROI after fees is a reasonable floor. For manual clicking where you pay time cost, target 5% or more. For one-click monthly positions on high-confidence edges, 8% or more justifies the variance. These are ROI thresholds relative to your stake per contract, not raw EV per trade. A 3% ROI on thousands of trades compounds to much more than a 10% ROI on a dozen.

Why use quarter-Kelly instead of full Kelly?

Full Kelly maximizes long-term geometric growth but assumes you know your edge exactly. In reality, your estimate of P_true is noisy. Quarter-Kelly (bet 25% of the Kelly fraction) cuts your variance roughly in half while sacrificing only about a quarter of expected growth. Most professional bettors use quarter to half Kelly for this reason. The calculator shows the full Kelly fraction and the recommended quarter-Kelly stake.

How does this differ from a regular EV calculator?

A regular EV calculator takes decimal or American odds and a true probability, then outputs dollar EV. This one takes a cents price (1 to 99) and a probability percentage, because prediction market contracts settle at $0 or $1. The math is different: win payout per contract equals (1 minus price), and loss equals the price. Fees also work differently. Kalshi charges a percentage of price times (1 minus price), and Polymarket adds flat gas per trade. Both are baked into the formula here so the EV output reflects net profit after costs.

Can this calculator handle Polymarket gas costs?

Yes. Switch the venue toggle to Polymarket and the Kalshi fee field swaps for a Polygon gas cost input. Default is $0.10 per trade, which reflects typical L2 costs at normal network load. The gas is subtracted from total EV rather than per contract, so if you buy 1000 contracts in one transaction, the $0.10 gas is negligible. For small positions (under 50 contracts), gas can meaningfully shrink or eliminate edge, and the calculator surfaces that in real time.