Prediction market fees explained

Prediction-market fees look small (a cent or two per contract), but they are charged on every trade and they change with the price. This guide explains the formula most exchanges use, sets out each platform’s official model, and works through the same trade at three prices. All fee data was last verified on October 4, 2026.

The formula: θ × C × P × (1 − P)

Most US exchanges calculate trading fees with the same structure:

Fee = θ × C × P × (1 − P)

• C is the number of contracts.
• P is the contract price in dollars (for example, 0.37 for 37¢).
• θ (theta) is the platform’s coefficient, such as 0.07 for a Kalshi taker.

The key term is P × (1 − P). Kalshi describes its charge as a fee “on the expected earnings on the contract,” and this product tracks how uncertain the outcome is. It peaks when a contract is a coin flip and shrinks as the outcome becomes near-certain either way.

The curve is symmetric: buying Yes at 10¢ costs the same fee as buying Yes at 90¢. As a share of what you spend, though, the cheap contract carries a much heavier fee. On Kalshi, $0.63 is 6.3% of a $10 stake at 10¢ but only 0.7% of a $90 stake at 90¢.

Official fee models by platform

Worked examples: 100 contracts at 10¢, 50¢ and 90¢

Each column is a purchase of 100 contracts, so the contract cost is $10, $50 or $90 and the payout if correct is $100.

How the main figures are calculated:

• Kalshi taker at 50¢: 0.07 × 100 × 0.50 × 0.50 = $1.75. At 10¢: 0.07 × 100 × 0.10 × 0.90 = $0.63. Maker at 50¢: 0.0175 × 25 = $0.4375, rounded up to $0.44; at 10¢, $0.1575 rounds up to $0.16.
• Polymarket US taker at 50¢: 0.0695 × 25 = $1.7375, rounded to $1.74. At 10¢: 0.0695 × 9 = $0.6255, rounded to $0.63. The maker rebate at 50¢ is 0.0125 × 25 = $0.3125, or $0.31.
• Robinhood at 90¢: 0.10 × 0.90 × 0.10 × 100 = $0.90, under the $1.00 cap (100 × $0.01). At 50¢ the formula gives $2.50, so the cap applies. For Gold at 90¢, 0.05 gives $0.45, which matches Robinhood’s own worked example. Add an exchange fee of up to $0.01 per contract.
• FanDuel Predicts: 2% of the $100 potential payout is $2.00 at every price, which means 20% of the stake at 10¢ but about 2.2% at 90¢.
• IBKR: flat per-contract charges from its pricing page, so price does not matter.

Formula-based exchanges are cheapest at the extremes and most expensive near 50¢. Flat per-contract and percentage-of-payout models cost the same at every price, so they take a large share of the stake on long shots and a small share on favorites.

Rounding matters on small orders

Kalshi rounds up to the next cent, so tiny orders pay more than the formula suggests. One contract at 50¢ has a raw fee of $0.0175, which is charged as $0.02, an effective 4% of the 50¢ stake rather than 3.5%. One contract at 10¢ ($0.0063 raw) is charged $0.01, or 10% of the stake. Splitting a position into many one-contract orders compounds this.

Polymarket US uses banker’s rounding to the nearest cent, so the upward bias is smaller, though a single 50¢ contract still rounds from $0.017375 to $0.02. Our news report on the new Polymarket US fee schedule covers what changed on October 1, 2026.

Try your own numbers

The spread: the cost not on any schedule

The fee is only part of the cost. The spread, the gap between the best bid and the best ask, is often larger. If a market shows 49¢ bid and 51¢ ask, buying at 51¢ and selling at 49¢ costs 2¢ per contract, more than Kalshi’s maximum taker fee of 1.75¢ per contract on a 100-contract order, before either trade’s fee is counted.

Some venues build a margin into prices directly. Secondary reviews of ForecastEx note that its Yes and No prices can sum to $1.01, which embeds roughly a cent per pair. Using limit orders and trading liquid markets are the two most reliable ways to keep spread costs down; our guide to how prediction markets work shows how.

Deposit, withdrawal and other charges

• Kalshi: debit-card deposits (Visa, Mastercard, Discover, Apple Pay and Google Pay) have a $10 minimum, and Kalshi says a 2% processing fee may apply. Bank transfers, wires, crypto and other methods are also offered.
• Polymarket US: debit and ACH deposits up to $50,000 a day; wires have a $5,000 minimum. Its documentation describes withdrawals as free.
• Robinhood: event contracts must be funded with settled cash; instant deposits cannot be used.
• Combos and parlays: Polymarket US charges combos as C × p × [0.0695 × (1 − p) + 0.06 × (1 − p)^4]. Novig builds a 0.10 × P × (1 − P) fee into parlay prices.

Which fee model suits which trader

• Frequent limit-order traders benefit most from Polymarket US’s maker rebate, Novig’s zero maker fee, or Kalshi’s lower maker coefficient.
• Long-shot buyers (contracts under about 20¢) pay least on formula-based exchanges and most under FanDuel’s 2%-of-payout model.
• Favorite buyers (contracts above about 80¢) pay a small share of their stake almost everywhere. At 90¢, formula fees are still lower in dollars: $0.63 per 100 contracts on Kalshi or Polymarket US, against $1.00 to $2.00 on flat per-contract or payout-based models.
• Pre-game sports traders pay no trading fee on Novig straight trades, but should still watch the spread.

For platform-by-platform totals, see our Kalshi vs Polymarket comparison and Robinhood vs Kalshi.