# Kalshi Elections — Mispricing Audit (Jun 22, 2026)

Date: 2026-06-22
Source: https://kalshi-audits.pages.dev/2026-06-22-kalshi-elections-mispricing-audit

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# Kalshi Elections — Mispricing Audit

Report date **2026-06-22** · Horizon **45 days** (markets closing on/before 2026-08-06) · Capital **$1,000** · Methodology **v3** (conviction-weighted, EV-agnostic, 15% cluster cap, entry-band screen)

## Verdict 100% CASH

0 picks · 10 logged rejects · $1,000 held in cash

The Elections category inside a 45-day window is, this week, a textbook **efficient-and-illiquid** book. After pulling every active market, reading the rules, checking 14-day price history and live order books, and grounding probabilities in primary news, **no contract clears the v3 screens**. The markets split cleanly into three buckets, none deployable:

- **Efficiently-priced deep favorites** (Trump / Díaz-Canel / Lai / Iran "leaves office / holds election") — NO already at 95–98¢, edge ≈ +1¢, below slippage and fees.
- **Live headline-driven situations I cannot out-forecast** — the Díaz-Canel market is repricing on an _active_ 2026 Cuban crisis (the "obvious" NO is a trap).
- **Untradeable noise** — generic-ballot, LA-mayoral novelty, and the Trump-states ladder all have 24h volume in the low hundreds or zero.

Per the v3 rule that _cash is a position_ and a near-empty book in an efficient week is the correct answer — not a failure — I am deploying nothing and holding the full $1,000. Padding the book with a thin-edge deep favorite or a regime-change coin-flip on auto-copy real money is exactly what the resolved track record punished.

## 1. How this was researched

**Selection mode: category-match.** `$CATEGORY="Elections"` matched `trading_events.category` directly and returned 22 active markets closing within 45 days — comfortably enough that no theme/keyword fallback was needed.

- **Source of truth:** fetched `/schema` first; confirmed `trading_events` (category), `trading_markets` (rules/close), `market_snapshots` (5-min price/volume history).
- **Stage 1 filter:** dropped markets with `volume24h<1500`, bid-ask spread >5¢, "fully priced" books (YES bid ≥95¢ or YES ask ≤5¢), announcer-noise, and the 2 Elections tickers already in active published picks (`KXMILLSPLATNER-26NOV03-JUL01`, `KXPLATNERDROPOUT-26`).
- **Stage 2 diligence:** for each survivor — and several near-survivors worth a look — read the exact resolution rules, pulled 14-day intraday history, hit the live Kalshi order book for top-of-book depth, and ran web searches for primary-source news.
- **Stage 3 / 3.5:** applied the reject gate (rules ambiguity, public-info only, has the price already moved, fillable without ≥3¢ slippage) and the conviction + entry-band screen.
- **Live quotes** are from the Kalshi public API order book at report time (YES-side cents). **Volume/OI** from the latest `market_snapshots` row (2026-06-22 12:00Z).

**Markets in category/horizon:** 22
**Survived Stage 1 cleanly:** ~0
**Diligenced:** 10
**Final picks:** 0

## 2. Markets reviewed

The full Elections slate within the horizon. "Effective entry" is the price you'd pay for the side a buyer would naturally take. Every row is a reject — reasons in §4.

| Ticker | Market | YES bid/ask | Vol 24h | OI | Lean | Disposition |
|---|---|---|---|---|---|---|
| KXTRUMPOUT27…AUG01 | Trump leaves office before Aug 1 | 2 / 3 | 13,216 | 2.17M | NO | PASS · priced |
| KXDIAZOUT-MDC…AUG01 | Díaz-Canel leaves office before Aug 1 | 22 / 25 | 298 | 12,202 | NO? | REJECT · live crisis |
| KXDIAZOUT-MDC…JUL01 | Díaz-Canel leaves office before Jul 1 | 4 / 5 | 1,074 | 86,238 | NO | PASS · priced/thin |
| KXELECTIRAN…JUL01 | Iran holds presidential election before Jul 1 | 0 / 3 | 307 | 31,284 | NO | PASS · priced/thin |
| KXLAIOUT-LCHI…JUL01 | Lai Ching-te leaves office before Jul 1 | 0 / 4 | 0 | 1,806 | NO | REJECT · illiquid |
| KXFETTERMANSWITCH…AUG01 | Fetterman leaves Democratic party before Aug 1 | 0 / 6 | 0 | 8,419 | NO | REJECT · illiquid |
| KXFETTERMANSWITCH…JUL01 | Fetterman leaves Democratic party before Jul 1 | 0 / 1 | 0 | 6,400 | NO | REJECT · illiquid/priced |
| KXMILLSPLATNER…AUG01 | Mills endorses Platner before Aug 1 | 9 / 16 | 0 | 2,255 | NO | REJECT · spread/cluster |
| KXMILLSPLATNER…JUN29 | Mills endorses Platner before Jun 29 | 1 / 3 | 0 | 2,997 | NO | REJECT · illiquid |
| KXPRATTCONCEDE…JUL01 | Spencer Pratt concedes LA mayoral primary | 16 / 22 | 539 | 4,367 | NO | REJECT · spread/ambig |
| KXAPCALLLAMAYOR…JUN30 | AP calls 2026 LA mayoral primary by Jun 30 | ~0 / ~100 | 1,010 | 2,010 | — | REJECT · priced/illiquid |
| KXGENERICBALLOT…T5.2 | Generic ballot above 5.2% (Jun 26) | 55 / 58 | 125 | 304 | — | REJECT · coin-flip/illiquid |
| KXTRUMPNUMSTATES…E1–E8 | Distinct US states Trump visits in June (ladder) | 0–55 | ≤199 | 50–675 | — | REJECT · illiquid ladder |

## 3. Top picks — detail and thesis

**No picks this run.** Every Stage-2 candidate failed either the liquidity filter, the "edge ≤ slippage/fees" test on deep favorites, or the "price already moved / can't out-forecast a live situation" reject gate. The detailed reasoning for each is in §4 — in a zero-pick run the rejects _are_ the report.

The two markets that came closest to a pick, and why each failed, are worth reading as the core finding:

### The near-miss that was a trap — KXDIAZOUT-MDC-26AUG01 · would-be BUY NO @ ~0.78

On the surface this screamed value: Díaz-Canel was **re-elected to a second five-year term** by Cuba's National Assembly and told NBC's _Meet the Press_ on April 10, 2026 that _"stepping down is not part of our vocabulary."_ A re-elected autocrat leaving office in six weeks looks like a ~95%+ NO — so NO at 78¢ looks like +17¢ of free edge. **It is a trap.** There is an _active_ [2026 Cuban crisis](https://en.wikipedia.org/wiki/2026_Cuban_crisis): a fuel/economic collapse, protests across Havana, Artemisa, Holguín and Santiago on June 2–3, fresh [US sanctions on Díaz-Canel (June 5)](https://www.pbs.org/newshour/world/u-s-sanctions-cuban-president-diaz-canel-in-latest-move-pressuring-islands-leadership), and an explicit Trump-administration regime-change campaign targeting Cuba "by end of 2026." The 22¢ YES is **informed pricing of a live ouster scenario**, not stale noise — and the price has whipsawed **3¢ ↔ 39¢ repeatedly over the last two weeks** (it re-spiked to 28–36¢ on June 18–20). I have no edge over a fast-moving headline market, and 24h volume (298) fails the liquidity floor anyway. **Reject.**

### The liquid one with no edge — KXTRUMPOUT27-27-26AUG01 · would-be BUY NO @ ~0.977

The only Elections market with real depth (OI 2.17M, 24h volume 13,216, 0.6¢ spread). But NO sits at 97.1–97.7¢ and has been rock-stable at 2–3¢ YES for the entire 14-day window. My estimate for Trump leaving office (death/removal/resignation) before Aug 1 is ~1.5–2%, so true NO ≈ 98% vs buying at 97.7 — an edge of roughly +1¢, inside the fee/slippage band. Risking 97.7¢ to make 2.3¢ is poor risk/reward, and the rules' death clause resolves at last traded price rather than YES, capping even the tail's payoff. Efficiently priced. **Reject.**

## 4. Recommended $1,000 portfolio

**Allocation: $0 deployed · $1,000 (100%) cash.** There is nothing to size, so the cluster and conviction tables are reported empty — by design, this is the auditable evidence that the screens cleared the book rather than the screens being skipped.

| Line | Contracts | Cost | Max payout | EV $ | % of capital |
|---|---|---|---|---|---|
| (no positions) | 0 | $0 | $0 | $0 | 0% |
| **Cash reserve** | — | $1,000 | $1,000 | — | 100% |
| **Total deployed** | 0 | **$0** | $0 | $0 | **0%** |

### Cluster exposure (cap: 15% / $150 per cluster)

| Cluster | Cost | % capital | vs 15% cap |
|---|---|---|---|
| — (none deployed) | $0 | 0% | OK |

### Conviction exposure (caps: HIGH 15% / MEDIUM 7% / LOW 3% per pick)

| Tier | Cost deployed | % capital |
|---|---|---|
| HIGH | $0 | 0% |
| MEDIUM | $0 | 0% |
| LOW | $0 | 0% |

### Risk profile

- **Worst case:** $0 at risk — capital is fully preserved. The only "cost" is opportunity cost if a re-screen later finds an edge.
- **Best case:** dry powder ready for the next audit window when a deeper, less headline-exposed market appears.
- **Most-likely outcome:** several of the deep-favorite NO rejects (Trump stays, Iran holds no election, Lai stays, Fetterman stays Dem) settle the way the market already prices them — which is exactly why there was no edge to harvest. The Díaz-Canel rejects are the genuinely uncertain ones and are shadow-tracked.
- **Concentration:** none.

### Execution notes & watchlist triggers

- **Díaz-Canel (KXDIAZOUT):** would only become a NO pick if it _over_-reacts — e.g. a headline-driven spike to 40¢+ YES with no concrete succession step — and only at small size given the headline whipsaw. Conversely, a confirmed transition plan or a hard escalation of the US "friendly takeover" pressure invalidates any NO lean entirely. This is news-trade territory, not a value pick.
- **Generic ballot (KXGENERICBALLOT):** revisit only if liquidity materializes (it closes June 26 — effectively too late this cycle).
- **General trigger:** re-run when a new mutually-exclusive election set lists with real two-sided depth; that is where structural mispricings (leg sums far from 100¢) tend to appear, and none of the current sets had the volume to exploit.
- No limit orders placed; no hedges needed with a flat book.

## 5. What I rejected and why

All 10 diligenced candidates below are **machine-logged and shadow-tracked to settlement**. If the rejects collectively perform as well as a real pick book would have, that itself is a finding about whether the Elections screen adds value this week. Cuts made specifically by the **Stage-3.5 entry-band screen** (coin-flips and the ladder) are flagged.

### KXDIAZOUT-MDC-26AUG01 — Díaz-Canel leaves office before Aug 1 LIVE-CRISIS TRAP

Would-be side **NO** @ ~0.78. Reject: active 2026 Cuban crisis (protests June 2–3, US sanctions June 5, explicit Trump regime-change push) means the 22¢ YES is informed, not stale; price whipsawed 3¢↔39¢ over two weeks. No edge over a fast-moving headline market, and 24h volume 298 < 1,500.

my P(stays)≈73% · market NO≈77% · YES bid/ask 22/25 · depth ~410 · OI 12,202 · cluster diaz-canel-out

### KXTRUMPOUT27-27-26AUG01 — Trump leaves office before Aug 1 PRICED

Would-be side **NO** @ ~0.977. Reject: efficiently-priced deep favorite. NO 97.1–97.7¢ vs true ~98% — edge ≈ +1¢, below slippage/fees. Risking 97.7¢ to make 2.3¢ is poor risk/reward; the death clause caps even the tail. >90¢ band, thin by construction.

my P(stays)≈98% · market NO≈97.5% · YES 2/3 · depth 7,736 · OI 2.17M · vol24h 13,216 · cluster trump-leaves-office

### KXDIAZOUT-MDC-26JUL01 — Díaz-Canel leaves office before Jul 1 PRICED / THIN

Would-be side **NO** @ ~0.95. Reject: deep NO favorite at 95–96¢, edge ≈ +1–3¢ for him surviving 9 more days; rides the same `diaz-canel-out` cluster as the headline-risk Aug rung; vol24h 1,074 < 1,500.

my P(stays)≈95% · market NO≈95.5% · YES 4/5 · depth 14,632 · OI 86,238 · cluster diaz-canel-out

### KXELECTIRAN-26JUL01 — Iran holds a presidential election before Jul 1 PRICED / THIN

Would-be side **NO** @ ~0.97. Reject: Pezeshkian was elected July 2024; the next regular presidential vote is ~2028. No election before Jul 1, 2026. NO already 97–99¢ (no edge room) and vol24h 307 < 1,500.

my P(no election)≈98% · market NO≈97–99% · YES 0/3 · OI 31,284 · cluster iran-election

### KXLAIOUT-LCHI-26JUL01 — Lai Ching-te leaves office before Jul 1 ILLIQUID

Would-be side **NO** @ ~0.96. Reject: Taiwan's president, no transition path in 9 days. NO already ~96–99¢ (no edge room); vol24h 0 and a wide YES 0.1–4¢ / NO 96–99.9¢ market — unfillable.

my P(stays)≈99% · YES 0/4 · OI 1,806 · vol24h 0 · cluster lai-leaves-office

### KXFETTERMANSWITCH-26MAY-AUG01 — Fetterman leaves the Democratic party before Aug 1 ILLIQUID

Would-be side **NO** @ ~0.94. Reject: Fetterman has repeatedly said he is staying a Democrat. NO already ~94¢+ (no edge room); vol24h 0 and a 0–6¢ YES market — illiquid, unfillable.

my P(stays Dem)≈96% · YES 0/6 · OI 8,419 · vol24h 0 · cluster fetterman-party-switch

### KXMILLSPLATNER-26NOV03-AUG01 — Mills endorses Platner before Aug 1 SPREAD / CLUSTER

Would-be side **NO** @ ~0.84. Reject: vol24h 0 and a 7¢ bid-ask spread (>5¢ filter). Also rides the `mills-platner-endorse` thesis already covered by active _published_ picks (JUL01 NO, PLATNERDROPOUT NO) — deploying here would compound a correlated, already-live cluster.

my P(no endorsement)≈85% · YES 9/16 · OI 2,255 · vol24h 0 · cluster mills-platner-endorse

### KXPRATTCONCEDE-27JAN01-JUL01 — Spencer Pratt concedes LA mayoral primary before Jul 1 SPREAD / AMBIGUOUS

Would-be side **NO** @ ~0.82. Reject: novelty market; vol24h 539 < 1,500 and a 6¢ spread (>5¢ filter). "Concede" is ill-defined — a primary candidate has no obligation to formally concede — so resolution carries definitional ambiguity risk on top of illiquidity.

my P(no concession)≈78% · YES 16/22 · OI 4,367 · vol24h 539 · cluster la-mayoral-primary

### KXGENERICBALLOTVOTEHUB-26JUN26-T5.2 — Generic ballot above 5.2% ENTRY-BAND CUT (COIN-FLIP)

Would-be side **YES** @ ~0.58. Reject (Stage 3.5): coin-flip band (~55–59¢) with no high-conviction edge — fails the entry-band screen outright. Compounded by vol24h 125 and OI 304, it is effectively untradeable.

my P≈55% · market≈57% · YES 55/58 · OI 304 · vol24h 125 · cluster generic-ballot

### KXTRUMPNUMSTATES-26JUL01-E1…E8 — Distinct US states Trump visits in June (ladder) ENTRY-BAND CUT + ILLIQUID

Would-be side **YES** on the modal leg (E6 @ ~0.51). Reject (Stage 3.5 + liquidity): mutually-exclusive ladder with negligible liquidity (per-leg OI 50–675, vol24h ≤199). The modal legs sit in the coin-flip band with no defensible count edge, and the whole set is unfillable. Checked the leg-sum for a structural arb — none worth the spread.

E5 14¢ · E6 51¢ · E7 24¢ · per-leg OI 50–675 · vol24h ≤199 · cluster trump-states-visited

## 6. Sources

- [NPR — Cuban President Díaz-Canel tells NBC News he will not step down](https://www.npr.org/2026/04/10/g-s1-116990/cuban-president-miguel-diaz-canel-tells-nbc-news-that-he-will-not-step-down) (April 10, 2026)
- [Al Jazeera — Cuban president defiant despite Trump pressure to resign](https://www.aljazeera.com/news/2026/4/10/cuban-president-defiant-despite-trump-pressure-to-resign) (April 10, 2026)
- [Al Jazeera — Cuba crisis explained: who holds power, and could Díaz-Canel be replaced?](https://www.aljazeera.com/news/2026/3/31/cuba-crisis-explained-who-holds-power-and-could-diaz-canel-be-replaced) (March 31, 2026)
- [PBS NewsHour — US sanctions Cuban President Díaz-Canel](https://www.pbs.org/newshour/world/u-s-sanctions-cuban-president-diaz-canel-in-latest-move-pressuring-islands-leadership) (June 2026)
- [Wikipedia — 2026 Cuban crisis](https://en.wikipedia.org/wiki/2026_Cuban_crisis) (fuel/economic crisis, June 2–3 protests)
- [Morning Star — Cuba re-elects Díaz-Canel for a new five-year term](https://morningstaronline.co.uk/article/w/cuba-re-elects-miguel-diaz-canel-president-for-new-five-year-term)
- [Wikipedia — 2024 Iranian presidential election](https://en.wikipedia.org/wiki/2024_Iranian_presidential_election) (Pezeshkian elected July 2024; cycle reset)
- [Wikipedia — Iranian presidential election (cycle/schedule)](https://en.wikipedia.org/wiki/Iranian_presidential_election)
- Kalshi public API — live order books & market state: api.elections.kalshi.com/trade-api/v2/markets/{ticker}/orderbook
- Kalshi DB mirror — `trading_events`, `trading_markets` (rules/close), `market_snapshots` (14-day price/volume history)

**Data sources:** Kalshi live mirror DB (categories, rules, 5-min snapshots) + Kalshi public API (live order books) + web search for primary-source news, as of 2026-06-22.

**Disclaimer:** Probabilities here are _subjective estimates_, not guarantees. Prediction-market contracts resolve to $1 or $0 — a losing position goes to zero. This is research and methodology documentation, not financial advice. Methodology v3: position size is gated by conviction tier and entry band, never by EV; `edge_cents`/`ev_pct` are recorded for calibration only because the resolved track record showed stated EV to be anti-predictive. This run deployed no capital.