Kalshi Politics — Mispricing Audit

Research date 2026-06-18 · Category Politics · Horizon 45 days (through ~Aug 1, 2026) · Portfolio budget $10,000 · 4 final picks across 4 independent theses.

1 · How this was researched

Starting universe: every active market in the Kalshi Politics category closing within 45 days, pulled from the live mirror (372 markets). The screen, in order:

Joined trading_markets → trading_events for category; kept only status='active', close_time inside the horizon.
Cut volume24h < 1500, bid-ask spread > 5¢, fully-priced books (YES bid ≥95¢ / ask ≤5¢), and "what will X say / mention" noise markets. → 47 liquid candidates.
Excluded every ticker already live in the feed from prior runs (the $EXISTING_PICKS set) to avoid duplicate signals.
For each survivor: read the resolution rules (the trap is usually in the wording), pulled 14-day intraday price/volume from market_snapshots, hit the live Kalshi orderbook for depth, and grounded a probability in primary-source news (wire reports, committee actions, the principals' own statements).
Rejected anything where the rules were ambiguous, the edge was already eaten by a recent move, or I couldn't size it without >3¢ of slippage.

Everything below resolves to a binary $1 / $0. Probabilities are my subjective estimates from public information only — no private edge. Prices are as of 2026-06-18 12:03 UTC from the mirror, cross-checked against the live Kalshi API orderbook.

2 · Markets reviewed

Ticker	Market (short)	YES bid/ask	Vol 24h	Verdict
KXCLAYTONCONF-…-JUN27	Jay Clayton confirmed DNI before Jun 27	35 / 38	3,948	PICK · BUY NO
KXLEAVEPOWELLGOV-26AUG01	Powell leaves Fed Board before Aug 1	12 / 14	2,195	PICK · BUY NO
KXCRYPTOSTRUCTURE-26JAN-AUG	Crypto market-structure bill law before Aug 1	17 / 18	24,030	PICK · BUY NO
KXFISAEXTEND-…-26AUG01	FISA 702 reauthorized into law before Aug 1	77 / 78	4,735	PICK · BUY NO
KXFISAEXTEND-…-JUL01	FISA 702 reauthorized before Jul 1	15 / 16	11,035	PASS · priced
KXWATSONRNC	SCOTUS bars counting late mail ballots (Watson v. RNC)	84 / 85	7,457	PASS · priced in
KXHORMUZNORM-…-B260801	Hormuz 7-day transit MA >60 before Aug 1	49 / 50	43,991	PASS · efficient
KXUSAIRANAGREEMENT-27-26AUG	US–Iran nuclear deal before Aug 1	8 / 9	138,655	PASS · thin premium
KX14AMENDCASE-26-AUG	Birthright-citizenship order takes effect before Aug 1	7 / 8	36,750	PASS · definitional
KXHEGSETHOUT-26APR-AUG01	Hegseth out as SecDef before Aug 1	15 / 16	8,240	PASS · no catalyst
KXKASHOUT-26APR-AUG01	Kash Patel out as FBI Dir before Aug 1	17 / 18	5,456	PASS · no catalyst
KXLAGODAYS-26JUN-0	Trump 0 Mar-a-Lago trips in June	91 / 92	3,432	PASS · priced
KXTRUMPUFC-26JUL-DJT	Trump attends UFC 329 (Jul 11)	17 / 18	7,917	PASS · no edge
KXAPRPOTUS-26JUN19-*	RCP Trump approval bucket (closes Jun 19)	—	6,317	PASS · too tight

Plus the Hormuz weekly ladder, Truth-Social post-count, Pulte-acting-DNI (94¢), and the "Anthropic Fable 5" series — all reviewed and rejected (see §5).

3 · The picks

Ordered by how defensible the edge is — source quality, unambiguous rules, and orderbook depth — not by raw EV. All four are BUY NO. NO prices shown are what you pay; NO ask = 100 − YES bid.

Pick 1 — KXCLAYTONCONF-26JUN11-JUN27 · BUY NO @ 0.64 High Conviction

Will Jay Clayton be confirmed as DNI before June 27, 2026?

Current

YES 35 / 38 → NO ≈ 65¢ (limit 0.64, scale in)

My true prob

YES (confirmed by Jun 27) ≈ 9% → NO ≈ 91%

Edge

NO fair ≈ 91¢ vs pay 64¢ → +27¢, ≈ +42% at fill

2026-06-27 03:59 UTC · OI 10,680 · vol24h 3,948

Thesis. The market still prices a ~36% chance Clayton is confirmed in the next nine days. But on June 17 President Trump personally cancelled the Senate Intelligence Committee hearing — he directed his own nominee not to appear — and tied the whole process to unrelated demands. A Senate confirmation requires a hearing, a committee vote, floor cloture and a final vote; none of that can happen by June 27 when the President is the one freezing it.

Clayton was nominated June 11; Thune/Cotton initially fast-tracked him, with a hearing set for 2 p.m. Wed June 17 (The Hill, Jun 16).
Overnight June 16–17, Trump posted that he was delaying the nomination, pressuring the Senate to attach the SAVE America Act to FISA reauthorization (NPR, Jun 17; CBS, Jun 17).
The committee then scuttled the hearing; Trump added a second condition — confirmation of Jamie McDonald as a US Attorney — before he'd let Clayton proceed (CNBC, Jun 17; The Hill, Jun 17).
Rules are clean: resolves YES only if Clayton is "the first person confirmed as Director of National Intelligence before Jul 18 [here, Jun 27]" — a hard, checkable Senate-floor event.

Cleanest way to lose: Trump abruptly cuts his SAVE-Act/McDonald deal in the next few days and the Senate rams a confirmation vote through before June 27. Possible, but a full committee-and-floor sequence in <9 days after a presidentially-ordered cancellation is a steep ask.

Price action: YES traded ~57¢ on Jun 12 on the fast-track story, then fell to 35¢ as the cancellation hit — the move has started but, at 91% fair, NO still has ~27¢ of edge. Liquidity: top of book is thin; post a 0.64 NO bid and accumulate over a day or two rather than sweeping.

Pick 2 — KXLEAVEPOWELLGOV-26AUG01 · BUY NO @ 0.88 High Conviction

Will Jerome Powell leave the Fed Board of Governors before Aug 1, 2026?

Current

YES 12 / 14 → NO ≈ 88¢ (limit 0.88)

My true prob

YES (announces/leaves by Aug 1) ≈ 5% → NO ≈ 95%

Edge

NO fair ≈ 95¢ vs pay 88¢ → +7¢, ≈ +8% at fill

2026-08-01 03:59 UTC · OI 65,778 · vol24h 2,195

Thesis. This resolves YES only if Powell announces or actually leaves the Board of Governors. He has done the opposite, repeatedly and on the record: he handed the chair to Kevin Warsh (sworn in May 22, 2026) but is explicitly staying on as a governor — his term runs to 2028 — framing it as a stand for Fed independence. A near-certain NO that the market is leaving at 12–14¢.

Powell confirmed on April 29, 2026 he will remain on the board after his chairmanship ends (NPR; CNN; PBS NewsHour).
He said he'll stay until the DOJ renovation probe "well and truly" concludes and the Fed has fought off the attacks on its independence — i.e., a deliberate intent not to leave near-term.
Warsh's appointment is official and dated (Federal Reserve, May 15) — so "Powell out as chair" is already settled and does not trigger this market, which is specifically about the governor seat.

Cleanest way to lose: the administration forces him out before Aug 1 — a "for cause" removal via the DOJ probe that actually sticks, or Powell reversing under pressure. Removing a sitting governor is legally contested and slow; he has signaled he would fight it. Low, but it's the real tail.

Liquidity: deep — ~$4k of YES-bid depth within 3¢, so a $2,000–3,000 NO fill near 88¢ is realistic. This is a high-confidence, modest-return income leg, not a home run.

Pick 3 — KXCRYPTOSTRUCTURE-26JAN-AUG · BUY NO @ 0.83 Medium Conviction

Will a crypto market-structure bill become law before Aug 1, 2026?

Current

YES 17 / 18 → NO ≈ 83¢ (limit 0.83)

My true prob

YES (signed into law by Aug 1) ≈ 12% → NO ≈ 88%

Edge

NO fair ≈ 88¢ vs pay 83¢ → +5¢, ≈ +6% at fill

2026-08-01 14:00 UTC · OI 95,547 · vol24h 24,030

Thesis. The CLARITY Act (Digital Asset Market Clarity Act, H.R.3633) is moving but nowhere near the finish line. To resolve YES it must become law — full Senate floor passage (60 votes, with only two Democrats aboard in committee), reconciliation with the House text, and a presidential signature — all before Aug 1, while several big-ticket disputes are unresolved and the Senate calendar is jammed ahead of the August recess.

Cleared Senate Banking 15–9 in mid-May and was reported by the Senate June 1 (CNBC; ABA Banking Journal).
An ethics/conflict-of-interest provision (barring officials' personal crypto stakes) remains a Democratic dealbreaker still being negotiated (Fortune).
The White House's July-4 target has slipped; lawmakers now float "end-of-July or even early August", and analysts note the bill "depends on the Senate getting a lot of non-crypto work done" first (CoinDesk, Jun 2).

Cleanest way to lose: leadership clears the floor and the House-Senate gap in a late-July sprint and Trump signs before Aug 1. Not impossible given Republican enthusiasm — but every step has to land inside a four-week, recess-shortened window.

Liquidity: good — ~$1.7k of depth at 83–84¢ NO and ~$3.5k within 5¢. Note: the desk already holds the before-Jul-1 version (NO); this is the longer-dated cousin and a separate contract.

Pick 4 — KXFISAEXTEND-26MAY-26AUG01 · BUY NO @ 0.24 Low Conviction

Will FISA Section 702 be reauthorized into law before Aug 1, 2026?

Current

YES 77 / 78 → NO ≈ 23¢ (limit 0.24, scale in)

My true prob

YES (reauth signed by Aug 1) ≈ 58% → NO ≈ 42%

Edge

NO fair ≈ 42¢ vs pay 24¢ → +18¢, ≈ +75% at fill (high variance)

2026-08-01 14:00 UTC · OI 9,011 · vol24h 4,735

Thesis. The market prices 77% that 702 is reauthorized by Aug 1. I think that's too confident, for two structural reasons. (1) There is no forcing deadline. The statute lapsed at midnight June 12, but surveillance legally continues under FISC certifications approved in March 2026 that run to ~March 2027 — so the intelligence community can wait. (2) It is now a multi-player hostage standoff with no obvious July offramp.

702 hit its statutory sunset June 12, 2026; agencies keep operating under the March FISC certs (TechTimes; Cato).
Trump is conditioning reauthorization on passage of the SAVE America Act (a documentary-proof-of-citizenship voter bill Democrats reject) and on confirming his US-Attorney pick (NPR, Jun 17; CNBC, Jun 17).
From the other side, Democrats have vowed not to reauthorize 702 unless Bill Pulte is removed from the acting-DNI post (The Hill, Jun 17) — i.e., two independent blockers, not one.
The reform fight has already dragged two-plus years and produced the first statutory lapse since 2018 — base rate for a clean six-week resolution is not 77%.

Cleanest way to lose: a July grand bargain. Republicans control both chambers and many want 702 back; if Trump extracts even a partial SAVE-Act win, leadership can move fast and sign before Aug 1. This is a genuine coin-flip forecast on a fluid negotiation, which is why it's Low Conviction and small.

Why Low, not Medium: the edge is a probabilistic call on a live negotiation (not a near-certain fact), and the book is thin — only ~$340 of YES-bid depth near 23–25¢. Size small, post NO bids at 0.24 and let them fill; do not chase above ~0.27.

4 · Recommended $10,000 portfolio

Deploy $9,000; hold $1,000 (10%) in reserve for opportunistic adds (esp. to Pick 4 if it fills cheap, or Pick 1 on any pop in YES). All entries via limit orders.

#	Ticker	Side	Limit (NO)	Contracts	Capital	Max payout	EV ¢/ct	EV %	Conv.
1	KXCLAYTONCONF-…-JUN27	NO	0.64	4,375	$2,800	$4,375	+27	+42%	High
2	KXLEAVEPOWELLGOV-26AUG01	NO	0.88	2,954	$2,600	$2,954	+7	+8%	High
3	KXCRYPTOSTRUCTURE-26JAN-AUG	NO	0.83	3,373	$2,800	$3,373	+5	+6%	Medium
4	KXFISAEXTEND-…-26AUG01	NO	0.24	3,333	$800	$3,333	+18	+75%	Low
	Total deployed			14,035	$9,000	$14,035		≈+24%

Deployed $9,000 · Max payout $14,035 (max profit $5,035) · Expected profit ≈ $2,150 · Blended EV ≈ +24% on capital at risk · Reserve $1,000.

Risk profile

Worst case (all four NO lose): −$9,000. Requires Clayton confirmed by Jun 27 and Powell off the board and CLARITY signed and 702 reauthorized — jointly remote.
Best case (all win): +$5,035 (payout $14,035).
Most-likely (Picks 1–3 win, Pick 4 loses): +$1,575 +$354 +$573 −$800 ≈ +$1,702.
Concentration by thesis. Three independent drivers — a Fed-personnel fact (Powell), a legislative-calendar race (CLARITY), and the Trump↔Senate FISA/SAVE-Act standoff. Picks 1 and 4 share that last catalyst: a fast, clean Trump deal could let Clayton be confirmed and 702 reauthorized together. That correlated tail is the single biggest risk, which is why Pick 4 is kept to $800 — Pick 1 only needs the standoff to outlast June 27, a much shorter fuse than Pick 4's Aug 1.

Execution notes

Limit-only. Books are thin at the top on Picks 1 and 4 — post NO bids and accumulate over 1–2 sessions. Pick 1: bid 0.64, accept up to ~0.66 avg. Pick 4: bid 0.24, do not chase above 0.27. Picks 2–3 have real depth and can be filled near-market.
Invalidation / watch triggers:
- Pick 1 — exit/avoid if the Senate reschedules the Clayton hearing and sets a floor vote before Jun 27, or if Trump publicly drops his conditions.
- Pick 2 — exit on any Powell statement of intent to resign, or a credible "for cause" removal action that courts let proceed.
- Pick 3 — exit if the Senate schedules CLARITY floor time with the ethics provision resolved and a House-reconciliation path before recess.
- Pick 4 — exit on any SAVE-Act/FISA package clearing committee, or a clean-reauthorization bill getting Rules/floor time. This is the leg to cut fastest if the standoff thaws.
Hedge: Picks 1 and 4 are a natural partial hedge on each other's timing — if you want to neutralize the "fast Trump deal" tail, the reserve can fund a small YES in the before-Jul-1 FISA market should it sag toward a few cents.

5 · What I rejected and why

Ticker / series	Why it didn't make the cut
KXHORMUZNORM-…-B260801	Efficiently priced. "7-day MA of transit calls >60" resolves off live IMF PortWatch / AIS data; Kalshi's own model and the 49–50¢ market already sit right at the coin-flip after the Trump–Pezeshkian reopening MOU. As of Jun 18 outbound traffic was still near-paralyzed but a backlog-clearing spike could flip it — I have no edge over a live-data market. (Sources: CNBC, Bloomberg.)
KXWATSONRNC	Edge already eaten. Watson v. RNC was argued Mar 23; a decision is expected by end of June and the conservative majority leaned toward the RNC. But YES already repriced 75→84¢ in a week on that consensus, and the resolution needs a specific preemption holding — a narrower ruling wouldn't cleanly trigger it. Fairly priced; no margin of safety.
KXFISAEXTEND-…-JUL01	Thesis already in the price. I agree 702 won't be reauthorized by Jul 1, but YES already collapsed 72→15¢ on the lapse + Trump's block. NO pays only ~15¢ for real headline risk — thin. The same view is expressed with far better asymmetry in the Aug 1 contract (Pick 4).
KXUSAIRANAGREEMENT-27-26AUG	Thin premium + already a feed pick. A full US–Iran nuclear deal in six weeks is unlikely, but NO pays only ~8¢. The before-Jul version is already an active pick — excluded to avoid a duplicate.
KX14AMENDCASE-26-AUG	Definitional risk. "Comes into effect for any period" is a fuzzy bar amid live nationwide-injunction litigation; a brief, partial, or stayed effect could spark a resolution dispute. Only 7¢ of premium for that ambiguity — not worth it.
KXHEGSETHOUT / KXKASHOUT	No catalyst. Cabinet-departure markets at 15–17¢ with no concrete reporting of an imminent exit. NO pays the same 15–17¢ for open-ended firing/headline risk — negative skew, pass.
KXLAGODAYS-26JUN-0 / KXPULTEDNI	Already priced. Trump-0-Mar-a-Lago-trips (91¢) and Pulte-acting-DNI (94¢) are near settled; <10¢ of juice for tail risk.
KXAPRPOTUS-26JUN19-* / KXTRUTHSOCIAL-*	Untradeable for this audit. The approval-bucket ladder closes Jun 19 (too tight to fill without slippage and effectively decided); the Truth-Social post-count markets are noise with no reliable live feed.
KXFABLERESTORE-27-* ("Anthropic Fable 5")	Cannot ground in primary sources. No verifiable public reporting on this "Fable 5 access restored" storyline. With no defensible, citable evidence I will not stake capital — excluded on principle.
KXTRUMPUFC-26JUL-DJT	No information edge. Trump-attends-UFC-329 is a pure attendance guess at 17¢; nothing public to price it better than the market.

Close cousins of several rejects are already live picks from prior runs (Hormuz before-Jul-1 NO, US–Iran before-Jul NO, Clayton before-Jun-24 NO, crypto before-Jul NO, Starmer before-Jul NO). Those were excluded from the candidate set up front to avoid duplicate feed entries; the picks above are all new contracts.

6 · Sources

Clayton / DNI / FISA standoff: NPR (Jun 17) · CBS News (Jun 17) · CNBC (Jun 17) · The Hill (Jun 17) · The Hill (Jun 16) · Washington Times (Jun 17)
FISA 702 lapse & certification continuity: TechTimes · Cato Institute · EPIC
Powell staying on the Fed Board: NPR (Apr 29) · CNN (Apr 29) · PBS NewsHour · Federal Reserve (May 15)
CLARITY Act / crypto market structure: CNBC (May 14) · CoinDesk (Jun 2) · Fortune (May 13) · ABA Banking Journal · Congress.gov H.R.3633
Hormuz (reject context): CNBC (Jun 18) · Bloomberg (Jun 16)
Watson v. RNC (reject context): Wikipedia · Bipartisan Policy Center · Cornell LII (24-1260)
Market data: Kalshi live mirror (trading_markets, trading_events, market_snapshots) and the public Kalshi orderbook API, snapshot 2026-06-18 12:03 UTC.

Data & method. Prices/volume from the Kalshi mirror and public orderbook API as of 2026-06-18; news from the primary sources linked above. Probabilities are my own subjective estimates from public information — there is no private-information edge in this report.

Disclaimer. This is research, not investment advice. Every contract resolves to $1 or $0; a "wrong" binary loses 100% of the stake. Prediction-market positions are speculative and illiquid — size accordingly and use limit orders. Edges are estimates and can be wrong.