# Kalshi Politics — Mispricing Audit (2026-05-30)

Date: 2026-05-30
Source: https://kalshi-audits.pages.dev/2026-05-30-kalshi-politics-mispricing-audit

---
# 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 

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

Live YES **0.66 / 0.67**Limit **0.68**True P ≈ **0.88**Edge **+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 

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

Live YES **0.21 / 0.22** (NO 0.79)Limit **0.81**True P(NO) ≈ **0.87**Edge **+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 

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

Live YES **0.34 / 0.36**Limit **0.39**True P ≈ **0.53**Edge **+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](https://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](https://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](https://www.bloomberg.com/news/articles/2026-05-29/strait-of-hormuz-ship-transits-are-rising-thanks-to-help-from-us)
- USNI News, 2026-05-01 — “Strait of Hormuz Commercial Transits at Lowest Level…”: [news.usni.org](https://news.usni.org/2026/05/01/strait-of-hormuz-commercial-transits-at-lowest-level-since-operation-epic-fury-start-shipping-data-shows)
- CNN, 2026-04-29 — Hormuz shipping visual deep-dive: [cnn.com](https://www.cnn.com/2026/04/29/world/iran-war-gulf-hormuz-shipping-maps-intl-vis)
- Wikipedia — 2026 Strait of Hormuz crisis (timeline/context): [en.wikipedia.org](https://en.wikipedia.org/wiki/2026_Strait_of_Hormuz_crisis)
- CNN, 2026-05-21 — full DNC 2024 autopsy: [cnn.com](https://www.cnn.com/2026/05/21/politics/read-full-dnc-2024-autopsy-cnn) · PBS NewsHour: [pbs.org](https://www.pbs.org/newshour/politics/read-the-dncs-full-post-election-autopsy-for-the-2024-campaign)
- CBS News — Senate reconciliation bill punt over “anti-weaponization” fund: [cbsnews.com](https://www.cbsnews.com/news/senate-reconciliation-bill-white-house-ballroom-doj-anti-weaponization-fund/) · The Hill: [thehill.com](https://thehill.com/homenews/senate/5889668-budget-reconciliation-anti-weaponization-fund-republicans/)
- NPR, 2026-04-29 — FISA §702 45-day extension: [npr.org](https://www.npr.org/2026/04/29/g-s1-119094/congress-fisa-702) · CNBC: [cnbc.com](https://www.cnbc.com/2026/04/30/fisa-section-702-congress-extension.html)
- VoteHub — presidential approval tracker (settlement source for the approval market): [votehub.com](https://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.