Kalshi Politics — Mispricing Audit
Report date 8 June 2026 · Category Politics · Horizon 45 days · Portfolio $1,000 · 322 markets screened → 3 picks
Bottom line. The politics board this week is dominated by a US–Israel–Iran war and a stalled nuclear-deal track, but those markets are either definitional traps (what counts as a "deal"?) or efficiently priced. The clean edges are three small, near-dated domestic markets:
fade the TRUMPMAMDANI "meeting" that the market re-rated up on a misleading headline,
buy MAMDANIEO on a base-rate gap, and take a thin lean against a LEAVESTARMER exit.
No high-conviction names this week — sizing is deliberately modest and ~10% is held in reserve.
1 · How this was researched
- Screen. Queried the live Kalshi DB mirror for every
active market whose event category = 'politics' closing within 45 days (322 markets). Joined the latest market_snapshots row per ticker and cut: 24h volume < 1,500; bid-ask > 5¢; already-priced (YES bid ≥ 95¢ / ask ≤ 5¢); and "what will X say"/mention noise. → 23 candidates.
- Rules. Pulled the full resolution text for the 14 most-liquid candidates. Roughly half the apparent edges died here on definitions (see §5).
- Tape. Pulled 14-day intraday history from
market_snapshots to spot moves and check whether a thesis was already priced in.
- Book. Hit the live Kalshi public orderbook (
/markets/{ticker}/orderbook) for each finalist to confirm I can size without paying ≥3¢ of slippage.
- News. Grounded every probability in primary sources — White House fact sheets, the House floor calendar, RealClearPolling, NYC Mayor's Office EO log, and named wire reporting. Sources in §6.
All prices are cents per contract (a contract pays $1.00 on YES). "NO @ 80" means buying the NO side for 80¢, paying out $1.00 if the event does not happen.
2 · Markets reviewed
Volume/price as of the latest 5-min snapshot, ~16:00Z 8 Jun 2026. The remaining ~9 screened candidates (UFC Freedom 250 celebrity-attendance markets, additional approval/Truth-Social legs) were celebrity-noise or duplicative and dropped.
3 · The picks
Ordered by conviction. Conviction reflects how defensible the edge is — source quality, how unambiguous the resolution rules are, and orderbook depth — not raw EV. There are no HIGH-conviction names this week.
Pick 1 — KXTRUMPMAMDANI-26JUN09 · BUY NO @ 0.80 · Medium conviction
"Will Donald Trump meet in person Zohran Mamdani before Jun 9, 2026?" · closes 2026-06-09 13:59Z (resolves in ~1 day)
Mispricing thesis. The only contact window left before the Jun 9 close is tonight's NBA Finals Game 3 at Madison Square Garden, which both men are slated to attend. A "both at the Knicks game" headline pushed YES back up toward ~20¢ today — but Mamdani has gone out of his way to say he will not be near Trump. The market is paying for an interaction the principal is actively avoiding.
Current: YES 20/21 → NO ask 80
True P(meeting): ~12%
NO fair value: ~88¢
Edge: ~+8¢
Return at fill: ~10%
Evidence.
- Mamdani told reporters he will sit in "a very different section of the stadium" than the president and confirmed "I won't be courtside or in a suite" — and dodged whether he'd meet Trump, saying only "if I do see him…" (ABC News, 8 Jun 2026).
- Game 3 tips off Mon June 8, 8:30pm ET at MSG (NBA.com) — i.e. before the Jun 9 cutoff, so it is the live resolution event.
- Their prior meetings were formal Oval Office sit-downs (Nov 2025, Feb 2026) — there is no announced White House meeting before Jun 9 (PBS).
- Tape confirms the re-rate is shallow: the market traded ~52¢ on Jun 4 (when joint attendance first surfaced), collapsed to ~28¢ Jun 6–7 as Mamdani distanced himself, and is chopping 14–44¢ today — sitting at 20/21. The crowd keeps over-reacting to "same arena."
Cleanest way this loses: the two men cross paths at MSG and exchange a brief, photographed greeting that Kalshi rules an "in-person meeting." Two NYC-celebrity Knicks fans in the same building is a non-trivial path — hence MEDIUM, not HIGH, despite the strong sourcing.
Size: 550 contracts NO
Limit: 0.81 (book fills ~0.805 avg)
Cost: ~$443
Max payout: $550
EV: ~+$44
Liquidity: ~287 contracts at NO 80, then ~1,360 more at NO 81 (resting YES bids of $57 @20¢ and $259 @19¢). 550 lots fill inside 1¢ of slippage.
Pick 2 — KXMAMDANIEO-26JUN13-T0 · BUY YES @ 0.13 · Medium conviction
"Will Mamdani sign above 0 executive orders between Jun 7–13, 2026?" (non-emergency) · closes 2026-06-14 13:59Z
Mispricing thesis. This is a base-rate market. Mayor Mamdani has been an unusually prolific executive-order signer, yet the contract prices "at least one non-emergency EO this week" at only ~13%. His empirical weekly hit rate is closer to ~23–26%.
Current: YES 12/13
Empirical weekly P: ~23–26%
True P (discounted): ~19–20%
Edge: ~+6¢
Return at fill: ~46%
Evidence.
- The public EO log shows 12 non-emergency executive orders between Jan 1 and Jun 1, 2026, falling in roughly 5–6 distinct weeks of ~23 in office → an empirical ~23–26% chance of "≥1 in a given week" (reviewmamdani.com/orders; cross-checked against NYC Mayor's Office EO releases).
- His most recent was the Jun 1 "bedtime suspension" EO for the Knicks' Finals run — a non-emergency order, confirming he's actively signing this month (ESPN).
- Resolution is clean and objective: the Mayor's Office publishes every numbered EO, and emergency vs non-emergency is labeled on the order itself.
- Book opened ~19¢ on Jun 7 and the bid has since sagged to 12 — i.e. the market is drifting against the base rate, not toward it.
Cleanest way this loses: his output is bursty (5 EOs in January, then a zero in March), and he just fired one on Jun 1 — so Jun 7–13 could simply be a quiet week with no policy roll-out, which is the modal outcome (most individual weeks are zeros). The edge is the base-rate gap, not a known catalyst; size accordingly.
Size: 1,800 contracts YES
Limit: 0.13
Cost: ~$234
Max payout: $1,800
EV: ~+$108
Liquidity: ~2,080 contracts resting at YES 13 (NO bid $271 @87¢). 1,800 lots fill at the limit with no slippage.
Pick 3 — KXLEAVESTARMER-26JUL01 · BUY NO @ 0.87 · Low conviction
"Will Keir Starmer leave / announce leaving as UK PM before Jul 1, 2026?" · closes 2026-07-01 03:59Z
Mispricing thesis. A genuine Labour leadership crisis is under way, but the contract resolves YES only if Starmer actually leaves or formally announces his intention to leave within a 3-week window — and he is publicly refusing to do either. This is a thin, honest lean, not a strong edge.
Current: YES 13/14 → NO ask 87
True P(leave/announce): ~10%
NO fair value: ~90¢
Edge: ~+3¢
Return at fill: ~3.4%
Evidence.
- Starmer told cabinet he will remain and would stand in any leadership contest, noting the formal challenge process "has not been triggered" (Al Jazeera, 12 May 2026).
- As of 11 May, ~80–98 Labour MPs had called for him to go but 159 members publicly backed him — short of the numbers to force a quick exit (2026 UK government crisis).
- The tape is flat: the market has sat in an 11–15¢ band for two weeks with no breakout, i.e. no fresh catalyst toward a near-term exit.
Cleanest way this loses: UK leadership crises move fast — a triggered confidence vote or a wave of cabinet resignations could produce a departure announcement well inside three weeks. With only ~3¢ of edge, this is a small position, not a core holding.
Size: 250 contracts NO
Limit: 0.87
Cost: ~$218
Max payout: $250
EV: ~+$7
Liquidity: very deep — thousands of contracts resting at YES 12–13 ($24.5k @12¢). No slippage concern.
4 · Recommended $1,000 portfolio
Deployed: ~$895
Cash reserve: ~$105 (10.5%)
Total max payout: $2,600
Aggregate EV: ~+$159
Blended EV on deployed: ~+17.8%
Risk profile
- Worst case (all three lose): –$895 (full deployed stake). Requires Trump & Mamdani to meet, Mamdani to sign no non-emergency EO Jun 7–13, and Starmer to quit/announce — three unrelated events, so jointly unlikely.
- Best case (all three win): payout $2,600 on $895 → +$1,705. Dominated by the 1,800-lot MAMDANIEO leg.
- Most-likely outcome: Pick 1 and Pick 3 resolve in our favour (~88% and ~90%) and Pick 2 loses (~80%). That nets roughly (550 + 250) − 234 − [stake on 1] ≈ +$155 after costs — i.e. the two NO legs pay for the speculative YES lottery and then some.
- Concentration: two of three names reference Mamdani, but on opposite and unrelated mechanics (a Trump meeting vs his own EO cadence) — they are nearly uncorrelated and even slightly offsetting (a high-activity Mamdani week helps Pick 2 but is irrelevant to Pick 1). Capital is concentrated by count in MAMDANIEO but by dollars the book is balanced (~$443 / $234 / $218).
Execution notes
- Use limit orders only. Post Pick 1 NO at 0.80 and step to 0.81 if unfilled before tip-off; post Pick 2 YES at 0.13 (do not chase above 0.14); Pick 3 NO at 0.87.
- Pick 1 is time-boxed: it resolves on tonight's game. If a credible report of a Trump–Mamdani greeting/handshake at MSG hits the wire, the thesis is dead — do not average down; the position is meant to be left to expire.
- Pick 2 watchlist trigger: if the NYC Mayor's Office posts any non-emergency EO dated Jun 7–13, the contract is effectively decided YES — take profit rather than wait for settlement if it gaps toward 0.90+.
- Pick 3 invalidation: a triggered Labour confidence vote, a coordinated cabinet-resignation wave, or any Starmer statement setting a departure timetable. Any of those → close the NO immediately; the 3¢ edge does not survive a real challenge.
- Reserve (~$105): hold for an opportunistic add if Pick 1 NO is offered ≥0.84 into tip-off, or if the FISA-702 / reconciliation timing markets (§5) resolve their ambiguity in the next 48h.
- Hedges: none required — positions are small, short-dated, and largely independent.
5 · What I rejected and why
- KXUSAIRANAGREEMENT — US–Iran nuclear deal before Jul 1 @ 8/9¢ (99,850 vol). The single most-traded politics market, but a definitional trap. The thing being negotiated is a 60-day ceasefire MOU that reopens Hormuz and only commits Iran to negotiate enrichment limits — does that resolve a "new Iran–US nuclear deal"? Iran publicly rejected the US proposal on Jun 9 and the enrichment-moratorium gap is wide (Iran 5 yrs vs US 20). A dispute over what counts could flip resolution either way, so per the screen's own rule we pass. (Axios, CNBC)
- KXHORMUZNORM — Hormuz 7-day transit MA > 60 @ 7/8¢. Traffic is crushed (Iran coordinating ~26 transits/24h vs a ~138/day baseline) since the Feb 28 war, so NO looks right — but buying NO at ~92 returns only ~8% and a signed deal would reopen the strait and spike traffic fast. Two-sided and thin; no deployable edge. (Hormuz crisis, Al Jazeera)
- KXNEWTARIFFS — new/increased June tariff action @ 90/92¢. Directionally near-certain given Trump's cadence, but the orderbook is empty right now — I can't fill near 92 without becoming the market. And the only confirmed June action so far (the Jun 1 steel/aluminum/copper proclamation) mostly cut rates, so "new or increased" isn't yet clearly satisfied. Watchlist, not a trade. (WH fact sheet)
- KXRECNCH — House passes reconciliation bill before Jun 10 @ 73/78¢. The Senate passed the ~$72B immigration-enforcement reconciliation bill on Jun 5; the House is in session Mon–Thu (Jun 8–11) and cancelled a prior Friday vote over attendance. The whole question is whether the floor vote lands Tue/Wed (YES) or slips to Thu (NO, after the close) — a coin-flip on timing inside a 5¢ spread. No defensible edge. (NPR, House floor)
- KXFISAEXTEND — FISA 702 reauthorization becomes law before Jun 12 @ 11/14¢. The 45-day stopgap expires Jun 12 and a long-term reauthorization stalled in the Senate on Jun 5. Whether Congress lands another last-minute extension "before Jun 12" is a knife-edge on both timing and on whether a stopgap counts as "reauthorizes." Too much resolution risk. (Roll Call, CNBC)
- KXAPRPOTUS-26JUN12-39.0 — Trump RCP approval below 39.0 @ 6/7¢. Tempting (some aggregators show ~38–39%), but the full approval bucket ladder reveals the market's implied RCP is ~40.2–40.5 — the heaviest buckets are 39.9–40.7. From there, a sub-39.0 print by Jun 12 needs a ~1.3-pt drop in a sticky average in days. The 6¢ is roughly fair, not cheap. (The Hill)
- KXTRUMPUFC — Trump attends UFC 329 (Jul 11, Las Vegas) @ 22/25¢. Trump is a UFC regular and McGregor–Holloway 2 is a marquee card, but there is no announced plan, and the rival White-House-area "UFC Freedom 250" (Jun 15) is where his involvement is centered. With no public signal, 22–25¢ is a fair guess, not a mispricing. (UFC 329)
- KXHEGSETHOUT @ 4/6¢ and KXKASHOUT @ 9¢ — cabinet exits before Jul 1. Hegseth is the one doing the firing (he purged the Army chief of staff and Navy secretary amid the Iran war), not the one being fired; no sign Patel is on the brink. Correctly-priced longshots — no edge. (CNN)
- KXMAMDANIEO emergency-vs-non-emergency caveat. Note the resolution requires a non-emergency EO; his May 20 FIFA World Cup parks order was an emergency order and would not count. That's baked into Pick 2's ~19–20% estimate (and is part of why it's only MEDIUM).
- KXTRUTHSOCIAL-26JUN13 post-count ladder & KXLAGODAYS trip set. Checked for structural arb: Truth-Social bucket mids sum to 105.5 (an overround — no free money), and Mar-a-Lago "0 trips in June" at ~93¢ is reasonable (Trump summers at Bedminster, not Florida). Both efficient.
6 · Sources