Expected value, Kelly sizing, and break-even analysis for prediction market trades. The math that keeps you honest.
What you'd pay per contract (1–99¢)
Your estimated chance of YES
Analysis
Cost$3.50
If Win+$6.50
If Lose-$3.50
Expected Value+$1.50
EV per Dollar Risked+42.9%
How it works: On prediction markets, contracts pay $1 if the event happens. If you buy YES at 35¢ and you think there's a 50% chance, your EV is 0.50 × $0.65 − 0.50 × $0.35 = +$0.15 per contract. Positive EV means the market is giving you better odds than you believe are fair.
What you'd pay per contract
Your estimated chance of YES
Kelly Sizing
Full Kelly23.1%
Half Kelly (recommended)11.5%
Quarter Kelly (conservative)5.8%
Bet Size (Half Kelly)$11.54
Contracts (Half Kelly)33
Bankroll
Kelly Criterion tells you the optimal fraction of your bankroll to bet, maximizing long-term growth while avoiding ruin. Formula: f* = (p × b − q) / b where p = win probability, q = 1−p, b = net odds (payout/cost − 1). Most pros use half Kelly to reduce variance. We learned this the hard way: overbetting on correlated signals killed our bankroll.
What you'd pay per contract
Platform fee (Kalshi: ~1¢ on wins)
For the scenario table
Break-Even Analysis
Break-Even Win Rate35.0%
Implied Probability35.0%
Edge Needed (vs implied)0.0%
Win Payout$0.65
Win Rate
Wins
Losses
Net P&L
ROI
Break-even win rate is the minimum accuracy you need to not lose money. At 35¢ per YES contract, you need to win at least 35% of the time. Fees shift this up. The scenario table shows what happens at different win rates over N trades — because knowing your break-even is useless if you don't know where you'll actually land.