# Kalshi Elections — Mispricing Audit (June 15, 2026)

Date: 2026-06-15
Source: https://kalshi-audits.pages.dev/2026-06-15-kalshi-elections-mispricing-audit

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# Kalshi Elections — Mispricing Audit

**Report date:** June 15, 2026 · **Category:** Elections · **Horizon:** markets closing within 45 days · **Capital:** $1,000

This was a **thin week** for the Elections book. Of 27 active markets closing inside the horizon, almost all are either fully priced (the AP-call markets at 99¢), illiquid with no tradeable side (Iran/Taiwan leave-office contracts), or efficiently priced around a knife-edge (Trump approval). **One thesis survived diligence:** the June 17 FOMC will almost certainly _hold_ rates, but a fractured committee makes a _unanimous_ hold unlikely — so "hold + ≥1 dissent" at ~36¢ is cheap and "hold + 0 dissents" at ~64¢ is rich. Both picks express that single view; the report is candid that the portfolio is therefore concentrated, and holds a large cash reserve rather than padding with thin-edge trades.

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## 1. How this was researched

- **Universe.** Pulled all `active` markets whose event `category = 'Elections'` closing between Jun 15 and Jul 30, 2026 from the live Kalshi mirror (join trading_markets → trading_events). 27 markets.
- **Screen.** Cut fully-priced markets (YES bid ≥95¢), markets with no tradeable side in the live orderbook, "what will X say"-style noise, and contracts already live as picks from prior runs. Liquidity here is thin across the board — `volume24h` tops out at ~1,500 — so I leaned on **open interest** and **live order-book depth** as the better liquidity proxies rather than the standard 1,500-share volume floor, and say so explicitly for each pick.
- **Diligence per candidate.** Resolution **rules text** from the mirror; **14-day intraday price history** from market_snapshots; **live top-of-book depth** from the Kalshi public API; and **primary-source news** (Fed reporting, polling aggregators) via web search/fetch.
- **Probability & edge.** A subjective true-probability estimate with explicit reasoning and stated tail risks; edge quantified in cents and expected return at the achievable fill.
- **Reject test.** Is the rules text unambiguous? Is the evidence public? Has the price already moved on the thesis in the last 48h? Can I fill without ≥3¢ slippage? Anything failing one of these is in §5, not the picks.
- **Excluded as already-live picks** (would duplicate the feed): KXTRUMPCOLLINS-26JUN16, KXMILLSPLATNER-26NOV03-JUL01, KXPLATNERDROPOUT-26.

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## 2. Markets reviewed

| Ticker | Market | Px (YES) | Vol 24h | OI | Verdict |
|---|---|---|---|---|---|
| KXFEDCOMBO-26JUN-0-T0 | FOMC: no change & >0 dissents | 31/36 | 1,360 | 7,958 | Pick 1 · BUY YES |
| KXFEDCOMBO-26JUN-0-0 | FOMC: no change & 0 dissents | 59/66 | 550 | 9,594 | Pick 2 · BUY NO |
| KXFEDCOMBO-26JUN-25C-0 | FOMC: 25bp cut & 0 dissents | 0/6 | 0 | 873 | pass — no side |
| KXFEDCOMBO-26JUN-25C-T0 | FOMC: 25bp cut & >0 dissents | 0/8 | 0 | 1,652 | pass — no side |
| KXTRUMPVH-26JUN19-T39.9 | Trump VoteHub approval >39.9% Jun 19 | 78/80 | 874 | 1,218 | reject — knife-edge |
| KXDIAZOUT-MDC-26JUL01 | Díaz-Canel leaves office by Jul 1 | 5/6 | 830 | 72,929 | reject — fairly priced |
| KXELECTIRAN-26JUL01 | Iran holds presidential election by Jul 1 | 0/3 | 333 | 31,089 | reject — no NO side |
| KXLAIOUT-LCHI-26JUL01 | Lai Ching-te leaves office by Jul 1 | 0/5 | 0 | 1,806 | reject — no NO side |
| KXPRATTCONCEDE-27JAN01-JUL01 | Spencer Pratt concedes LA mayoral primary | 54/55 | 1,184 | 3,549 | reject — statement noise |
| KXTRUMPNUMSTATES-26JUL01-E5/E6 | # states Trump visits in June (=5, =6) | 32/38 | ~0 | <700 | reject — no volume |
| KXAPCALLLAMAYOR-* | AP calls LA mayoral primary (3 strikes) | 98–99 | var | var | reject — fully priced |
| KXMILLSPLATNER-26NOV03-JUN29 | Mills endorses Platner by Jun 29 | 1/4 | 0 | 2,997 | reject — no volume |
| KXFETTERMANSWITCH-26MAY-JUL01 | Fetterman leaves Democratic party by Jul 1 | 0/1 | 0 | 6,400 | reject — no volume/side |

Prices are YES bid/ask from the latest snapshot (Jun 15) or live orderbook. Several near-identical strikes (TRUMPNUMSTATES E1–E8, three AP-call dates) are collapsed to one row. Tickers already live as picks are not shown.

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## 3. The picks

Ordered by conviction. Conviction reflects how _defensible the edge_ is (source quality + clarity of resolution rules + order-book depth), not the raw EV. Both picks express one thesis — see the concentration note in §4.

 PICK 1 

### Pick 1 — KXFEDCOMBO-26JUN-0-T0 BUY YES @ 0.38 High conviction

Market: **June FOMC — "No change AND >0 dissents"**
Now: **31/36¢**
True prob: **~58%**
Edge: **+22¢**
Return at fill: **~61%**
Resolves: **Jun 17, 2026**

Mispricing thesis

The market is ~97% sure the Fed _holds_ on June 17 (the 25bp-cut legs price ~4–8¢ combined), and I agree. The disagreement is on **dissents**: this leg ("hold _with_ at least one dissent") trades ~34–36¢, implying only a ~35% chance the hold is anything but unanimous. Given how openly split this committee is, that is too low. A unanimous hold requires _every_ voter — including a governor who has dissented repeatedly for cuts — to fall in line at the same meeting. I put that at well under half, so ≥1 dissent at ~58%.

Evidence

- **The committee just dissented four ways.** The April 29, 2026 FOMC produced an 8–4 vote — the **most dissents on a single decision since October 1992**. Gov. Stephen Miran dissented for a 25bp cut; three regional presidents objected to the statement's easing-bias language. (CNBC, Apr 29 2026; DeFiRate.)
- **Miran is a permanent voter.** As a Board governor he votes at _every_ meeting, and his dissents are substantive (he wants cuts), not collegial. For this leg to lose given a hold, even Miran has to stop dissenting — unlikely on a policy he's pressed repeatedly.
- **The macro backdrop forces a split.** May headline CPI ran **4.2% y/y** and unemployment is ~4.3%; futures now lean toward a year-end _hike_, not a cut. A hold leaves both the hawks (who want tightening) and Miran (who wants easing) unsatisfied — exactly the setup that produces dissents. (Kraken economic brief, Jun 10 2026.)
- **New chair ≠ guaranteed unity.** June 17 is Kevin Warsh's first meeting as chair. First meetings sometimes draw consensus, but that courtesy doesn't bind an entrenched policy dissenter, and a hawkish Warsh holding rates does nothing to win over the doves. (DeFiRate; Kraken.)

Tail risks

- **Cleanest way to lose:** a "new-chair honeymoon" unanimous hold — Warsh rallies the committee and even Miran abstains from dissenting. Possible, but it cuts against four-way April dissent and Miran's track record.
- **Surprise cut.** If the Fed cuts (this leg requires "no change"), it resolves NO regardless of dissents. Market-implied ~4%; baked into the 58% estimate.
- **Definitional:** low. "Dissents >0" resolves off the official recorded FOMC vote — there is no judgment call.

Numbers · liquidity · price history

- **Fill:** best YES ask 36¢ with ~500 contracts resting (the next offer gaps up to ~68¢), so size the immediate clip near 500 and scale the rest with limit orders ≤38¢ over the 48h into the meeting. OI 7,958; vol24h 1,360.
- **EV:** at 36¢, fair ~58¢ → +22¢ edge, ~61% return; payout $1.00. At a 38¢ limit, edge +20¢.
- **History:** traded ~30¢ in early June, sagged to ~18¢ on Jun 10, then re-rated to ~34¢ by Jun 15 on rising volume (vol24h ~1,400). The thesis is partly recognized — but the **last-48h move is flat (~+1¢)** and 34–36¢ is still far below ~58¢, so material edge remains.

 PICK 2 

### Pick 2 — KXFEDCOMBO-26JUN-0-0 BUY NO @ 0.43 Medium conviction

Market: **June FOMC — "No change AND 0 dissents"**
Now (YES): **59/66¢**
True P(YES): **~38%**
Edge (NO): **+20¢**
Return at fill: **~48%**
Resolves: **Jun 17, 2026**

Mispricing thesis

The mirror image of Pick 1, and a slightly broader bet. "Unanimous hold" trades ~64¢ YES; the same evidence says a clean, dissent-free hold is a minority outcome (~38%). **Buying NO at ~42¢** wins on _any_ result except a unanimous hold — i.e. the likely hold-with-dissent _and_ any surprise cut — so NO fair value is ~62¢.

Evidence

- Identical to Pick 1: April's record four dissents, permanent dissenter Miran, a 4.2% CPI backdrop splitting hawks from doves, and a new chair who can't satisfy both wings with a hold.
- **Why it's labelled medium, not high:** it is the _same underlying thesis_ as Pick 1 (positively correlated, not a hedge). I down-weight conviction to flag that, and to discourage double-sizing the dissent view. The edge itself is well-grounded; the structural concentration is the reason for the lower badge.

Tail risks

- **Cleanest way to lose:** the same unanimous-hold scenario that sinks Pick 1. If that happens, _both_ picks lose together — the portfolio's primary risk (§4).

Numbers · liquidity · price history

- **Fill:** NO is bought against the resting YES bids — ~1 contract at the 38¢-equivalent, then real depth (~500) around a 42¢ NO cost; set a 43¢ limit. OI 9,594 (the deepest leg of the set).
- **EV:** at 42¢, NO fair ~62¢ → +20¢ edge, ~48% return; payout $1.00.
- **History:** YES ran 75–81¢ on Jun 8–10, then fell to ~65¢ by Jun 15 as the dissent leg re-rated — the same repricing seen from the other side, confirming the move is dissent-driven.

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## 4. Recommended $1,000 portfolio

| # | Ticker | Side | Limit | Contracts | Cost | Max payout | EV ¢/ct | EV $ | Conv. |
|---|---|---|---|---|---|---|---|---|---|
| 1 | KXFEDCOMBO-26JUN-0-T0 | BUY YES | 38¢ | 750 | $270 | $750 | +22 | $165 | High |
| 2 | KXFEDCOMBO-26JUN-0-0 | BUY NO | 43¢ | 550 | $231 | $550 | +20 | $110 | Medium |
| Total deployed | $501 | $1,300 | — | $275 |  |  |  |  |  |
| Cash reserve | $499 | — | — | — |  |  |  |  |  |

Deployed $501 of $1,000. Blended EV ≈ **55%** on capital at risk; expected dollar edge ≈ **$275** if my probabilities are right. Costs use the signal prices (36¢ / 42¢); filling up to the stated limits trims edge by ~2¢/contract.

Why the reserve is ~50%, not 10%

This is deliberate, not laziness. The category is genuinely thin this week and my one defensible thesis is **liquidity-capped** (~500 contracts per leg at good prices before the book gaps). Forcing the remaining capital into the rejects below would mean either paying >3¢ slippage or buying near-zero-edge trades — i.e. padding. The reserve is dry powder for (a) scaling the FOMC legs via patient limits as depth refreshes into Jun 17, and (b) the July election calendar.

Risk profile

- **Worst case (~38% — unanimous hold):** both picks lose, −$501. The two picks are the **same thesis**, so they fail together — this is the dominant risk and the reason deployment is capped at ~half of capital.
- **Best / most-likely case (~58% — hold with ≥1 dissent):** both win. Pick 1 returns +$480 (750×$0.64), Pick 2 +$319 (550×$0.58) = **+$799** on $501.
- **Surprise cut (~4%):** Pick 1 loses (−$270), Pick 2 wins (+$319) → roughly +$49 net — the one scenario where the two legs partially offset.
- **Concentration:** 100% of deployed capital is on a single event (June FOMC) and a single variable (dissents). There is no diversifying second thesis this week — I rejected the candidates that could have provided one (Cuba, approval) on edge grounds rather than manufacture diversification.

Execution notes

- **Limit discipline.** Pick 1: bid 36–38¢, never chase past 38¢ (the book gaps to ~68¢). Pick 2: bid 42–43¢. Work both as resting limits over the 48h into the meeting; partial fills are fine.
- **Same-thesis cap.** Treat Picks 1 + 2 as one position for sizing. Do not add a third FOMC leg on top — that is the same bet a third time.
- **Watchlist trigger.** KXTRUMPVH-26JUN19-T39.9 — if the live VoteHub average moves clearly above ~41% (a >1pt cushion over the 39.9 line) before Jun 19, YES at ~80¢ becomes a defensible add; at ~40% it stays a pass.
- **What invalidates the thesis.** Any credible pre-meeting signal that Warsh has lined up a unanimous hold (e.g. Miran publicly softening, or reporting of consensus) — exit both. Resolution is fast (Jun 17, ~2pm ET), so there is little time decay to manage.
- **Hedge.** None needed beyond the natural partial offset on a surprise cut; the position is small relative to capital by design.

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## 5. What I rejected and why

- **KXTRUMPVH-26JUN19-T39.9 — Trump approval >39.9% on Jun 19 (~79¢ YES).** VoteHub — the _resolution source_ — currently reads ≈40%, i.e. essentially **on the line**. Broader aggregates straddle it (≈38.6% blended; some trackers 37–42%). With the average sitting within ~0.1pt of the strike and only four days to go, the outcome is poll-noise, and the market's 79% already prices the distance-to-threshold about as well as I can. No defensible edge — tantalizing proximity, but not actionable.
- **KXDIAZOUT-MDC-26JUL01 — Díaz-Canel leaves office by Jul 1 (~5–6¢ YES).** Tempting as a "buy NO at 95¢" near-certainty, but there is an _active_ 2026 Cuba crisis with real replacement speculation (Al Jazeera, Mar 31; NPR, Apr 10 — he publicly refused to step down). That makes 5–6¢ a defensible price for a live tail, not an obvious mispricing, and my edge (≈+2–3¢) sits inside the noise — against an ugly 3–5% chance of losing 95¢. Rejected on risk/reward.
- **KXELECTIRAN-26JUL01 & KXLAIOUT-LCHI-26JUL01 — Iran election / Lai Ching-te leaves office by Jul 1.** Both are correctly priced near zero (no scheduled election in Iran before 2028-29; Lai's term runs to 2028). But there is **no cheap NO side** in either book — the YES bid is 0, so a NO buyer pays ~100¢. Real-but-untradeable. Watchlist only.
- **KXPRATTCONCEDE-27JAN01-JUL01 — Spencer Pratt concedes the LA mayoral primary (~54¢).** Resolution turns on whether a reality-TV candidate _issues a concession statement_ — a "will X say" market explicitly out of scope, and an unforecastable coin-flip on a personal social-media post. No defensible edge.
- **KXTRUMPNUMSTATES-26JUL01-E1…E8 — # of states Trump visits in June.** A mutually-exclusive range set, but the legs trade essentially zero volume (E5/E6 at 32–38¢ with vol24h ≈0). Untradeable without moving the market against myself; no public edge on a travel-count tally.
- **KXFEDCOMBO-26JUN-25C-0 / 25C-T0 — the two "25bp cut" legs.** Correctly priced cheap (~4–8¢) and consistent with a ~96–97% hold. No tradeable NO side (empty YES book), and I have no edge calling a surprise cut. Pass.
- **AP-call (KXAPCALLLAMAYOR-*), KXMILLSPLATNER-…-JUN29, KXFETTERMANSWITCH.** Either fully priced (AP-call strikes at 98–99¢) or dead (0 volume, no two-sided book). Nothing to trade.
- **Already-live picks (excluded up front to avoid feed duplicates):** KXTRUMPCOLLINS-26JUN16, KXMILLSPLATNER-26NOV03-JUL01, KXPLATNERDROPOUT-26.

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## 6. Sources

- [CNBC — "Fed holds rates steady amid dissent," Apr 29 2026](https://www.cnbc.com/2026/04/29/fed-interest-rate-decision-april-2026.html) (the 8–4 vote; four dissents; Miran).
- [DeFiRate — Fed decision odds (June 2026)](https://defirate.com/prediction-markets/fed-decision-odds/) (hold ~96–98%; four April dissents; Warsh as incoming chair).
- [Kraken — Economic brief, Jun 10 2026](https://blog.kraken.com/economic-brief/june-10-2026) (Warsh's first meeting; hold expected; CPI 4.2%).
- [VoteHub — presidential approval averages](https://votehub.com/) (TRUMPVH resolution source; Trump approval ≈40%).
- [USPollingData — Trump approval tracker](https://uspollingdata.com/polls/trump-approval/) (blended ≈38.6% in June 2026).
- [NPR — Díaz-Canel "will not step down," Apr 10 2026](https://www.npr.org/2026/04/10/g-s1-116990/cuban-president-miguel-diaz-canel-tells-nbc-news-that-he-will-not-step-down).
- [Al Jazeera — "Cuba crisis explained," Mar 31 2026](https://www.aljazeera.com/news/2026/3/31/cuba-crisis-explained-who-holds-power-and-could-diaz-canel-be-replaced).
- Live market data: Kalshi mirror (trading_markets, trading_events, market_snapshots) and the Kalshi public API order-book endpoint.

**Data sources:** Kalshi read-only mirror (markets, events, 5-minute snapshots) as of Jun 15, 2026; Kalshi public API for live order-book depth; web search/fetch for primary-source news. Prices in US cents (0–100).

**Disclaimer:** Not investment advice. Every probability here is a _subjective_ estimate and may be wrong; prediction-market contracts can and do resolve to zero, and you can lose 100% of capital on any position. The two picks share a single thesis and will rise or fall together. Liquidity is thin — fills may differ materially from the quoted prices. Do your own diligence before trading.