Kelly criterion calculator for prediction markets
How much should you bet? Enter your bankroll, the price and your probability to get the Kelly bet size for a Kalshi or Polymarket contract, fees included.
The money you set aside for trading
The ask for the side you buy, Yes or No
Fee per contract = rate × price × (1 − price). Rates as of October 2026.
10.0% of your bankroll: 200 contracts at 50.0¢ each, fee included.
How to use the Kelly criterion calculator
- Bankroll: the money you have set aside for trading, not your total savings.
- Price you pay: the ask for the contract you are buying, in cents. For "No", enter the No price.
- Your probability: your estimate that the contract pays $1.
- Platform and fee: fees raise your real cost, so they shrink the bet. Choose "No fee" for Polymarket limit orders or fee-free markets.
- How much of Kelly: full Kelly maximises long-run growth only if your probability is exactly right. Half or quarter Kelly is the usual choice.
If the calculator says No bet, the price is above your estimate after fees. Use "Check the other side" to see whether the opposite contract has an edge.
The formula
For a contract that pays $1, bought at an all-in cost c (price plus fee) with your probability p:
Kelly share of bankroll = (p − c) ÷ (1 − c)
It is the classic Kelly formula, (b × p − q) ÷ b, with the payout odds of a $1 contract, b = (1 − c) ÷ c. The calculator then multiplies by your chosen fraction and rounds down to whole contracts.
Worked examples
| Price | Your probability | Full Kelly | Half Kelly on $1,000 |
|---|---|---|---|
| 50¢ | 55% | 10% | $50 (100 contracts) |
| 50¢ | 60% | 20% | $100 (200 contracts) |
| 20¢ | 30% | 12.5% | $62.50 (312 contracts) |
| 90¢ | 93% | 30% | $150 (166 contracts) |
All without fees. With Kalshi's taker fee, the first row drops from 10% to about 6.7%: small edges shrink fast once you pay to trade.
Why most traders bet half Kelly or less
| Share of Kelly | Long-run growth vs full Kelly | Swings in your bankroll |
|---|---|---|
| Quarter | about 44% | a quarter as large |
| Half | about 75% | half as large |
| Full | 100% | full |
| Double | about 0% | twice as large |
Half Kelly keeps about three-quarters of the growth with half the volatility, and betting twice the Kelly amount gives roughly zero long-run growth. Because everyone sometimes overestimates their edge, betting less than Kelly is the safer mistake.
When to bet less than the calculator says
- Correlated positions: ten Senate races can all move with one national swing. Treat them as one bigger bet.
- Thin markets: you may not be able to buy your full size without moving the price (slippage explained).
- Long-dated markets: money locked up for a year cannot be used elsewhere.
- Uncertain estimates: if you have not tracked your forecasts, start with quarter Kelly (Brier score).
Kelly criterion: frequently asked questions
What is the Kelly criterion?
A formula, published by John L. Kelly Jr. at Bell Labs in 1956, for the share of your bankroll to bet on an opportunity with an edge so that your money grows fastest over many bets.
What is the Kelly formula for prediction markets?
(p − c) ÷ (1 − c), where p is your probability and c is the price plus the fee per contract.
Should I use full Kelly?
Only if your probabilities are exact. Most experienced traders use a quarter to a half.
What does it mean if the calculator says no bet?
Your probability is not above the all-in price, so there is no edge on that side. Check the other side, or skip the trade.
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