How to read implied probability (60¢ isn't 60% likely for you)
Implied probability is the chance of an outcome that a prediction market price implies: a contract that pays $1 and trades at 60¢ implies about a 60% chance. But the price isn’t your edge. To profit, you need the true probability to be higher than the price plus fees, so a 60¢ contract on Kalshi needs better than about 61.7% to break even.
The price is the market’s probability
Prediction market contracts pay $1 if the outcome happens and $0 if it doesn’t. So the price, in cents, reads directly as a probability: 5¢ implies about 5%, 92¢ about 92%. That’s the crowd’s estimate, updated in real time as people trade.
Why 60¢ isn’t “60% likely” for your trade
If you buy Yes at 60¢, you risk 60¢ to win 40¢. The market is paying you 40¢ to be right and charging you 60¢ to be wrong. Your job isn’t to guess whether the event happens; it’s to decide whether the true probability is higher than the price. If you think it’s really 70% and it trades at 60¢, that gap is your edge.
- Profit if right = $1 − price
- Loss if wrong = price
- Break-even probability = price, plus fees
Price, odds and break-even: a conversion table
This table converts common prices into sportsbook-style odds and shows how Kalshi’s taker fee (0.07 × contracts × price × (1 − price), rounded up to the cent) raises the probability you need to break even. Polymarket US’s taker coefficient is almost the same (0.0695).
| Price | Implied probability | Decimal odds | American odds | Kalshi taker fee, 100 contracts | Break-even probability after fee |
|---|---|---|---|---|---|
| 5¢ | 5% | 20.00 | +1900 | $0.34 | 5.34% |
| 10¢ | 10% | 10.00 | +900 | $0.63 | 10.63% |
| 25¢ | 25% | 4.00 | +300 | $1.32 | 26.32% |
| 40¢ | 40% | 2.50 | +150 | $1.68 | 41.68% |
| 50¢ | 50% | 2.00 | +100 / −100 | $1.75 | 51.75% |
| 60¢ | 60% | 1.67 | −150 | $1.68 | 61.68% |
| 75¢ | 75% | 1.33 | −300 | $1.32 | 76.32% |
| 90¢ | 90% | 1.11 | −900 | $0.63 | 90.63% |
| 95¢ | 95% | 1.05 | −1900 | $0.34 | 95.34% |
Our calculation from Kalshi’s published fee formula, for taker orders. Makers pay less, or nothing, depending on the market.
Two patterns stand out. Fees are largest in cash terms around 50¢, and they matter most, relative to your stake, on cheap long shots: at 5¢ the fee adds about 7% to your cost. For more on fees and sizing, see Kalshi fees explained and our prediction market strategy guide.
Reading prices as edge
Treat every price as a question: is the market too high or too low? If you have no reason to think it’s wrong, the fee means you’re expected to lose a little on each trade. New to all this? Start with how prediction markets work.
Not financial or betting advice.
Frequently asked questions
What is implied probability in a prediction market?
It's the chance of an outcome that the price implies. Contracts pay $1 if right, so a price of 60¢ implies about a 60% chance. It's the market's estimate, not a guarantee, and it moves as traders buy and sell.
How do I convert a prediction market price to odds?
Decimal odds are 1 ÷ price, so 40¢ is 2.50. For American odds, a price under 50¢ is +100 × (1 − price) ÷ price (40¢ is +150), and a price over 50¢ is −100 × price ÷ (1 − price) (60¢ is −150).
Do fees change the implied probability?
They change your break-even. With Kalshi's taker fee of 0.07 × contracts × price × (1 − price), 100 contracts at 50¢ cost $1.75 in fees, so you need the outcome to happen about 51.75% of the time to break even, not 50%.
Sources
- Kalshi Fee Schedule (effective February 5, 2026; official PDF)
- Kalshi API docs — fee rounding
- Polymarket US Docs — Fees
- Polymarket US Docs — Place an order (contracts pay $1)
Last checked:
18+ (21+ where required). Prediction markets involve risk of loss — only trade what you can afford to lose. Gambling problem? Call or text 1-800-MY-RESET (National Problem Gambling Helpline, 24/7).
Last updated 2026-10-18. Not financial or betting advice.