Kalshi Politics — Mispricing Audit

Report date 2026-05-30 · horizon 30 days · capital $1,000 · category “politics”

The politics board this week has exactly one rich vein: the Strait of Hormuz weekly transit-call markets, which resolve off a public IMF dataset I can read directly. Everything else screened out as efficiently priced, illiquid, speculative, or already resolved. Final book is 3 picks, all one underlying, structured as a range bet that the May 25–31 transit week lands around 42 — comfortably between 30 and 50.

Bottom line. Buy YES on “>30 calls” (a near-floor), buy NO on “>50 calls” (a robust ceiling), and buy YES on “>40 calls” (the value leg). $870 deployed, $130 (13%) held back. The book is profitable in every outcome except a fresh sub-30 collapse, and the most-likely week (~42) is the best case. Heavy single-underlying concentration — read the risk section.

1 · How this was researched

Filter. Pulled active “politics” markets (joined trading_markets ↔ trading_events.category) closing within 30 days from the local Kalshi mirror. Cut anything with 24h volume < 1,500, spread > 5¢, “say/mention” noise, or already pinned ≥95¢ / ≤5¢. 236 → 14 candidates.
Diligence. For each survivor: full resolution rules from the DB, 14-day intraday history from market_snapshots, and a live orderbook pull from the Kalshi public API (the mirror is minutes-to-days stale — that mattered, see DNC autopsy in rejects).
Grounding. The Hormuz markets resolve on IMF PortWatch daily transit-call data, which I queried directly from PortWatch’s ArcGIS feature service (the same series Kalshi settles on). News context from Bloomberg, USNI, CNN, Wikipedia.
Sizing. Probabilities from a bootstrap of recent daily PortWatch counts under two regimes (stable vs. re-closure). Every position checked against real book depth so no leg pays ≥3¢ slippage.

Key honesty caveat: PortWatch publishes weekly (Tuesdays); the latest print is May 24. The full May 25–31 resolution figure is not yet public — so the market and I are both forecasting. My edge is the run-rate plus public “traffic is rising” reporting against a book that sold off and is pricing more downside than the data supports. It is not private information.

2 · Markets reviewed

Ticker	Market	YES bid/ask	Vol 24h	Verdict
…WEEKLY-T30	>30 Hormuz transit calls, May 25–31	66 / 67	2,651	PICK · BUY YES
…WEEKLY-T50	>50 Hormuz transit calls, May 25–31	21 / 22	3,010	PICK · BUY NO
…WEEKLY-T40	>40 Hormuz transit calls, May 25–31	34 / 35	2,190	PICK · BUY YES
…WEEKLY-T75	>75 Hormuz transit calls, May 25–31	5 / 6	2,591	WATCHLIST
…HORMUZNORM-B260615	Hormuz 7-day MA >60 before Jun 15	9 / 10	90,836	WATCHLIST
…VOTEHUBTRUMPUPDOWN	Trump approval >39.3% (VoteHub) Jun 4	44 / 45	3,005	PASS · fair
…SENATEREC-JUN14	Reconciliation bill passes Senate by Jun 14	54 / 55	2,777	PASS · no edge
…SENATEREC-JUN06	Reconciliation bill passes Senate by Jun 6	30 / 31	4,835	PASS · no edge
…UAPFILES	Govt releases new UAP files before Jun 8	37 / 38	2,439	PASS · speculative
…FISAEXTEND-JUN11	FISA §702 reauth becomes law before Jun 11	11 / 12	5,000	REJECT · no liq
…TRUMPNBAFINALS	Trump attends a 2026 NBA Finals game	66 / 69	21,758	REJECT · thin book
…DNCAUTOPSY-JUN01	DNC releases 2024 autopsy before Jun 1	25 / 30*	1,663	REJECT · stale data
…ATTENDUFC250-AROS	Adin Ross attends UFC Freedom 250	35 / 39	3,027	REJECT · not politics
…TRUTHSOCIAL-B189	Trump 180–199 Truth posts, wk of May 24	6 / 7	2,612	REJECT · noise

*DB-mirror quote; the live book is ~99¢ with no depth (see rejects). Ticker prefix KX and event suffix abbreviated for width; full tickers in the picks and JSON.

The underlying story. There is an ongoing 2026 Strait of Hormuz crisis: after US/Israel–Iran escalation, commercial transits collapsed to ~4–5% of normal (≈95 ships/day pre-crisis). PortWatch logged near-zero days (0 on May 6 & 8), then a stabilization at ~6 transits/day through mid/late May as international escort convoys ramped up. On May 29 Bloomberg reported transits rising with US navigation help. That backdrop is the entire basis for the weekly-threshold picks.

3 · The picks

Pick 1 — KXHORMUZWEEKLY-26MAY31-T30 · BUY YES @ 0.68 High conviction

Live YES 0.66 / 0.67Limit 0.68True P ≈ 0.88Edge +21¢EV +31%Closes Jun 2

Thesis. “More than 30 transit calls May 25–31” is close to a physical floor. The two most-recent completed PortWatch weeks were 44 (May 11–17) and 42 (May 18–24); the daily run-rate has held near 6/day. By report date, six of the seven window-days have already elapsed at that rate (~36 cumulative), and late-May reporting says traffic is rising, not falling. Market YES at 0.67 implies only a 67% chance — it is pricing far more sub-30 risk than the data supports.

PortWatch daily totals, May 18–24: 2 · 6 · 12 · 4 · 5 · 9 · 4 → 42/wk | May 11–17 → 44/wk

Evidence. IMF PortWatch Daily Chokepoints series (the settlement source), queried direct: stable ~6/day since May 11. [PortWatch chokepoint6 / feature service]
Evidence. Bloomberg, May 29 2026 — “Strait of Hormuz Ship Transits Rise as US Aids Vessels With Navigation Advice.” Trend is up into the resolution window.
Bootstrap. Recent-regime weekly sum: mean 43, P(>30)=0.96. Even a pessimistic regime that re-includes the early-May near-closure days still gives P(>30)=0.57. Blended ≈ 0.88.

Cleanest tail risk: a fresh acute disruption — new mine strike, tanker attack, or an escort-convoy suspension — in the final days that drags the realized week below 30. No such event is currently reported (the opposite). Secondary: a PortWatch methodology revision.

Liquidity: book supports ~635 contracts to a 0.68 limit (avg fill ~0.674, ≈0.3¢ slippage). 14-day path: T30 drifted 78→64→66 as the market converged from a naive open toward run-rate value — still below fair.

Pick 2 — KXHORMUZWEEKLY-26MAY31-T50 · BUY NO @ 0.81 High conviction

Live YES 0.21 / 0.22 (NO 0.79)Limit 0.81True P(NO) ≈ 0.87Edge +8¢EV +9%Closes Jun 2

Thesis. Most regime-robust edge on the board. For the week to exceed 50 calls it needs >7.1/day — above the recent run-rate — and P(>50) is low under both the optimistic bootstrap (0.16) and the pessimistic re-closure bootstrap (0.02). Whatever the regime, “week ≤ 50” is the safe side. Small absolute edge, high certainty — this is the ballast leg.

Evidence. No completed week since the crisis began has approached 50 in the current escort-throttled regime (44, 42 the last two; escort convoys physically cap daily throughput).
Why it’s priced at 0.22 YES. The book carries a “surge/reopening” premium. Real, but it would take a sharp, sustained jump to clear 50 in a single week — not what escorted convoys deliver.

Cleanest tail risk: a fast backlog-clearing surge — 600+ tankers are reportedly queued; if a credible reopening lets escorts scale hard, daily counts could spike and push the week past 50.

Liquidity: NO depth is good — ~335 contracts to a 0.81 limit (avg ~0.796, ≈1¢ slippage). This leg also hedges Picks 1 & 3: it wins in the same collapse scenario that would hurt the YES legs.

Pick 3 — KXHORMUZWEEKLY-26MAY31-T40 · BUY YES @ 0.39 Medium conviction

Live YES 0.34 / 0.36Limit 0.39True P ≈ 0.53Edge +17¢EV +42%Closes Jun 2

Thesis. The value leg. The point forecast for the week (~42–43) sits just above the 40 strike, yet YES trades at 0.35–0.36. Both recent completed weeks (44, 42) cleared 40, and the trend is up — a ~53% true probability against a 0.36 ask is a clean +EV asymmetry (max return ~170%).

Evidence. Same PortWatch run-rate; 40 is below the trailing two-week average of 43.
Why only medium. This is the most regime-sensitive leg: P(>40) swings from 0.62 (stable) to 0.17 (re-closure). It is genuinely near the median, so it behaves like a slightly-better-than-coinflip with great odds — not a lock.

Cleanest tail risk: a merely quiet week (36–40, no new crisis needed) just misses the strike. Lower-probability but doesn’t require a shock.

Liquidity: sized small (~470 contracts) precisely because the top is thin — limit 0.39 keeps avg fill ~0.372 (≈1–2¢ over the effective 0.36 ask); going past 0.40 would breach the 3¢ rule.

4 · Recommended $1,000 portfolio

Pick	Side	Limit	Contracts	Cost	Max payout	True P	EV $	EV %
T30	YES	0.68	635	$428	$635	0.88	+$131	+31%
T50	NO	0.81	335	$267	$335	0.87	+$25	+9%
T40	YES	0.39	470	$175	$470	0.53	+$74	+42%
Total	—	—	1,440	$870	$1,440	—	+$230	+26%

Deployed $870 · cash reserve $130 (13%) for opportunistic adds. Blended expected return on deployed capital ≈ +26%; dollar edge ≈ +$230 over a ~3-day hold to the Jun 2 close.

Risk profile

Because all three legs settle on the same number (Hormuz transit calls, May 25–31), the book is best read as a single payoff curve over that one figure:

Realized week	T30 YES	T40 YES	T50 NO	Net P/L	Likelihood
≤ 30 (collapse)	lose	lose	win	−$534	low (~12%)
31 – 40	win	lose	win	+$101	moderate
41 – 50 (base case)	win	win	win	+$571	most likely (~42)
> 50 (surge)	win	win	lose	+$236	low (~13%)

Worst case: −$534 (−53% of deployed) only if the week finishes ≤30 — i.e., a fresh near-total re-closure during days that are already mostly elapsed and reportedly improving.
Best case & most-likely case coincide: a ~42-call week (the point forecast) lands in the 41–50 zone and pays +$571.
Profitable in three of four regions; the only loss region is the low-probability collapse, where the T50 NO leg cushions it.
Concentration: 100% one underlying, one settlement date, one data source (IMF PortWatch). This is deliberate — it’s the only defensible edge on the board — but a single bad data print or a single geopolitical shock moves the whole book. Size accordingly; this is not a diversified portfolio.

Execution notes

Use limit orders at the stated prices; do not chase. T40 especially — the top of book is thin, so leave the resting limit at 0.39 and accept partial fills rather than lifting 0.40+.
Settlement timing: markets close Jun 2 13:00Z, but the May 25–31 PortWatch figure publishes on the Tuesday update (~Jun 2). Expect resolution shortly after close, not intraday.
Watchlist triggers from the reserve $130: (a) if T75 NO drifts above ~0.97 on a panic bid, add — >75 is a near-impossibility; (b) if HORMUZNORM YES spikes above ~0.05 on a false “reopening,” add NO.
What invalidates the thesis (close all YES legs): any wire report of a new Hormuz closure, mine/tanker incident, or escort-mission halt between now and Jun 1; or a PortWatch print showing late-May daily counts falling back toward zero.
Hedge already embedded: T50 NO is a partial hedge on the YES legs’ downside — no extra hedge needed.

5 · What I rejected and why

KXDNCAUTOPSY-26-JUN01 — the trap of the week. The DB mirror quoted YES at ~27¢, which looked like a screaming buy: the DNC publicly released its 192-page 2024 autopsy on May 21 (CNN, PBS), clearly satisfying “released before Jun 1.” But the live book is already ~99¢ with no resting orders — the market repriced days ago; the mirror was stale. No edge, nothing to trade. Lesson: always confirm against the live API.
KXVOTEHUBTRUMPUPDOWN (Trump approval >39.3%, Jun 4) — fair. Liquid and clean, but the strike is set right at VoteHub’s current time-adjusted average, so 0.44/0.45 is efficient. Generic trackers cite ~43% approval, but the strike-and-price combination implies VoteHub’s specific series sits within a point of 39.3%. No defensible edge.
KXSENATEREC Jun 6 & Jun 14 — no informational edge. The reconciliation (ICE/CBP funding) bill was punted before Memorial Day over a GOP fight on the DOJ “anti-weaponization” fund; the Senate returns Jun 1 to “pick up where we left off.” Pure legislative-timing uncertainty where I have no better read than the 0.30 / 0.54 quotes.
KXFISAEXTEND-JUN11 — thin edge + untradeable. §702 runs on a 45-day patch into ~mid-June, so there’s no forcing action before Jun 11; 0.11 is roughly fair. Moot anyway — the NO side shows ~$1 of depth at top.
KXUAPFILES — speculative. “Govt releases new UAP files before Jun 8” at 0.37 with no verifiable scheduled disclosure to anchor a probability. A guess, not an edge.
KXTRUMPNBAFINALS — can’t size. Attendance speculation with a 3¢ spread and only ~$15–40 at top of book; no edge and no room to deploy without slippage.
KXHORMUZWEEKLY-T75 NO & KXHORMUZNORM NO — watchlist, not picks. Both are the right side directionally (a >75 week or a 60/day 7-day average by Jun 15 are very unlikely), but at 0.94–0.95 / 0.90–0.91 the market already prices the surge/backlog tail; my residual edge is <3¢ — too thin to deploy, worth adding only on a panic move.
Screened pre-diligence: KXATTENDUFC250 (Adin Ross attendance — celebrity noise, not politics) and KXTRUTHSOCIAL-B189 (Truth-post counting — announcer noise, near-pinned).

6 · Sources

IMF PortWatch — Strait of Hormuz chokepoint: portwatch.imf.org/pages/chokepoint6 (settlement data; daily transit calls queried from the PortWatch Daily_Chokepoints_Data ArcGIS feature service)
IMF PortWatch — data & methodology: portwatch.imf.org/pages/data-and-methodology
Bloomberg, 2026-05-29 — “Strait of Hormuz Ship Transits Rise as US Aids Vessels With Navigation Advice”: bloomberg.com
USNI News, 2026-05-01 — “Strait of Hormuz Commercial Transits at Lowest Level…”: news.usni.org
CNN, 2026-04-29 — Hormuz shipping visual deep-dive: cnn.com
Wikipedia — 2026 Strait of Hormuz crisis (timeline/context): en.wikipedia.org
CNN, 2026-05-21 — full DNC 2024 autopsy: cnn.com · PBS NewsHour: pbs.org
CBS News — Senate reconciliation bill punt over “anti-weaponization” fund: cbsnews.com · The Hill: thehill.com
NPR, 2026-04-29 — FISA §702 45-day extension: npr.org · CNBC: cnbc.com
VoteHub — presidential approval tracker (settlement source for the approval market): votehub.com
Live market data & orderbooks: Kalshi public API, api.elections.kalshi.com/trade-api/v2

Data sources: local Kalshi SQLite mirror (trading_markets, market_snapshots, trading_events); Kalshi public trade API for live orderbooks; IMF PortWatch ArcGIS feature service for Hormuz transit data; web sources listed above. Prices and depth captured 2026-05-30.

Disclaimer. Not investment advice. Probabilities here are subjective estimates, not guarantees — they reflect one analyst’s read of public data at a point in time. Prediction-market contracts can and do resolve to zero; you can lose your entire stake on any position. The full book is concentrated in a single underlying tied to an active armed conflict, which can gap violently on headlines. Do your own diligence and size to what you can afford to lose.