Kalshi Politics — Mispricing Audit (Sentinel, managed)
Report date 2026-07-06 · Category: Politics (category-match mode) · Horizon 45 days · Capital $1,000 · Methodology v3 (conviction-weighted, entry-band-screened, EV-agnostic sizing). Picks below count toward the public track record and are cleared for auto-copy.
1. How this was researched
Mode: category-match. lower(trading_events.category) = 'politics' returned 274 active markets closing within 45 days (by 2026-08-20), so no theme-keyword fallback was needed. For each market I joined the latest market_snapshots row (all snapshots current to within ~5 minutes of query time, 2026-07-06 ≈16:00 UTC).
Stage-1 mechanical screen: volume24h ≥ 1,500, bid-ask spread ≤ 5¢, not fully priced (YES bid < 95¢, YES ask > 5¢), not an announcer-noise market, and not one of the 60+ contracts already live in users' feeds from prior runs (those are excluded up front as duplicate-pick risk). Twelve markets survived. Three near-misses with tight spreads and 24h volume of 978–1,121 (KXKNESSET-27-AUG01, KXTRUMPVH-26JUL10-T40.2, KXEOWEEK-26JUL11-0) were added to diligence with the relaxation noted — each is flagged in the table below. The Politics book is thin this week: most substantive markets (SCOTUS merits cases, Senate confirmations, budget bills) show near-zero 24h volume or 5¢+ spreads and were mechanically cut.
Stage-2 diligence on 15 candidates: full rules text from the mirror DB, 14-day intraday history from market_snapshots, live top-of-book depth from the Kalshi public API (recorded per pick), and primary-source news research (Federal Register API, State Department transcripts, IMF PortWatch ArcGIS feed, VoteHub and RCP live JSON APIs, Times of Israel/JPost/Haaretz, Roll Call Factbase). Stage-3.5 v3 screens then gated every survivor by conviction tier and effective entry band; ev_pct/edge_cents are reported for calibration only and did not set position size.
2. Markets reviewed
| Ticker | Market | Bid/Ask ¢ | Vol 24h | Verdict |
|---|---|---|---|---|
| KXTRUMPPASSPORT-26-JUL20 | Trump-image passport issued before Jul 20 | 71 / 74 | 1,926 | PICK — BUY YES |
| KXLAGODAYS-26JUL-0 | Exactly 0 Mar-a-Lago trips in July | 90 / 91 | 8,815 | PICK — BUY YES |
| KXTRUMPVH-26JUL10-T40.2 | VoteHub approval >40.2% on Jul 10 † | 73 / 75 | 978 | PICK — BUY YES |
| KXKNESSET-27-AUG01 | Knesset dissolved before Aug 1 † | 74 / 77 | 1,100 | PICK — BUY YES |
| KXMAXSHIPSHORMUZ-26JUL31-AL50 | Max daily Hormuz transits ≥50 in July | 60 / 62 | 1,811 | REJECT — edge inside error |
| KXEOWEEK-26JUL11-0 | >0 executive orders Jul 5–11 † | 38 / 39 | 1,122 | REJECT — coin-flip band |
| KXTRUTHSOCIAL-26JUL11-T220 | >220 Truth Social posts Jul 5–11 | 84 / 86 | 27,426 | REJECT — edge eaten |
| KXTRUTHSOCIAL-26JUL11-B210 | 200–220 Truth Social posts Jul 5–11 | 13 / 15 | 15,485 | REJECT — tail band |
| KXTRUMPPHOTO-26JUL12-5 | Getty photo-days = 5 this week | 32 / 33 | 1,687 | REJECT — noise market |
| KXAPRPOTUS-26JUL10-40.3 | RCP approval 40.2–40.4 on Jul 10 | 42 / 44 | 3,291 | REJECT — fairly priced |
| KXAPRPOTUS-26JUL10-40.6 | RCP approval 40.5–40.7 on Jul 10 | 26 / 27 | 2,499 | REJECT — tail band |
| KXAPRPOTUS-26JUL10-40.9 | RCP approval 40.8–41.0 on Jul 10 | 13 / 14 | 1,870 | REJECT — thin, correlated |
| KXAPRPOTUS-26JUL10-41.2 / 41.3 | RCP approval ≥41.1 rungs | 6 / 7 · 5 / 6 | 1,547 · 2,596 | Assessed with ladder — tails, no basis |
| KXLAGODAYS-26JUL-1 | Exactly 1 Mar-a-Lago trip in July | 7 / 10 | 9,679 | REJECT — correlated leg |
† admitted below the 1,500-contract 24h-volume screen (978–1,122) on tight spreads; noted per methodology. Prices as of 2026-07-06 ≈16:00–17:30 UTC.
3. Picks — detail and thesis
Pick 1 — KXTRUMPPASSPORT-26-JUL20 · BUY YES @ 0.76 limit · HIGH CONVICTION
"Will the State Department issue one or more U.S. passports containing an image or visual representation of Donald Trump's face after May 4 and before Jul 20, 2026?"
Mispricing thesis. The resolving event has, for practical purposes, already happened — the market simply hasn't digested it. This is the "Patriot Passport" rollout, and it is live:
- Jul 2, 2026 — first passports physically distributed. Secretary Rubio hosted the "Consular Affairs Patriot Passport Launch" at the State Department and told recipients "you guys are the first in the country to have it" (official State Dept transcript).
- Jul 6, 2026 (today) — general public issuance began at the Washington Passport Agency: "the passports will be issued starting July 6 … the default passport out of the Washington Passport Agency when available" (AFAR, Jul 1, confirming State Dept; verified directly today). Issuance mechanics — in-person appointments, proof of travel within 2 weeks, $60 expedite — per Forbes, Jun 27.
- Design unambiguously contains Trump's face: blue/white Trump portrait with gold signature, unveiled Apr 28–29 (NPR, Time); 25,000–30,000 printed.
- No injunction or lawsuit found — only a Senate letter demanding answers (Sen. King, press release).
Tail risks (cleanest first). (1) A resolution dispute that the Jul 2 reception copies were ceremonial and that no regular applicant demonstrably receives one before Jul 20 — mitigated by today's issuance start, two full weeks of runway, expedite-only appointments (passports printed same-week), and intense press coverage that will document recipients. (2) A sudden pause/recall of the design. (3) Verification lag past the close date. Netting these: 93%.
Numbers. 190 contracts at ≤76¢ (est. avg fill 75.7¢) = $143.90 cost (14.4% of capital, inside the 15% HIGH cap and 15% cluster cap). Max payout $190; EV +17.3¢/contract ≈ +$33 (+22%) — recorded, not used for sizing.
Liquidity / entry context. yes_bid 71 / yes_ask 74; ~181 contracts fillable at ≤76 (21@74, 10@75, 150@76); vol24h 1,926; OI 3,951. Slippage vs ask ≈ 1.7¢ — within the 3¢ rule.
Price history. Traded 61–66¢ mid-June → 75–80¢ after the Jun 27 issuance-rules coverage → sold off today to an intraday low of 54¢ before recovering to 71/74. That dip against overwhelming primary-source evidence is the opportunity; nothing in today's news supports it.
Pick 2 — KXLAGODAYS-26JUL-0 · BUY YES @ 0.91 limit · HIGH CONVICTION
"Will Trump make exactly 0 trips to Mar-a-Lago as President in July 2026?"
Mispricing thesis. A seasonal near-lock priced like it has real event risk. Mar-a-Lago closes for the season around Mother's Day and stays shut through fall; Trump does not go there in summer.
- Trump "made his final visit to Palm Beach for the season earlier this month" — early May 2026 (Washington Post wire via Bangor Daily News, May 19, 2026).
- The same market settled YES-on-zero for June 2026 (KXLAGODAYS-26JUN-0 → yes, Kalshi settled data), and May 2026 settled at exactly 1 (the pre-closure visit).
- 2025 precedent: zero visits from Easter (Apr 20) to Oct 17 — "first time in six months" (WFLX); zero Palm Beach trips in July 2025 (trip list).
- July 2026 schedule is away from Florida: NATO summit in Ankara Jul 7–8, Carlisle PA Jul 15, World Cup final at MetLife Jul 19, Bedminster weekends (2026 trip list); no Mar-a-Lago events on the club calendar.
Tail risks. (1) A one-off Florida swing — Hard Rock Stadium (Miami) hosts a World Cup quarterfinal Jul 11 and the third-place match Jul 18; if Trump attended and overnighted at the closed club, resolution counts a "trip." (Prior-run feed already carries Trump-attends-UFC-329-Las-Vegas Jul 11, which conflicts with a Miami trip that same day.) (2) An unscheduled fundraiser or hurricane-related visit. The 90→91 drift down over the past 48h looks like profit-taking, not information — no Florida reporting emerged.
Numbers. 110 contracts at 91¢ = $100.10 (10.0% of capital, deliberately below the 15% HIGH cap — deep-favorite band, thin edge by construction, don't over-allocate chasing 4¢). Max payout $110; EV +4¢/contract ≈ +$4.4 (+4.4%).
Liquidity / entry context. yes_bid 90 / yes_ask 91; 276 contracts fillable at 91; vol24h 8,815; OI 19,006. Zero slippage at limit.
Price history. Stable 93–95¢ Jul 1–4, easing to 90–91 on Jul 5–6 on no news — entry improved 3–4¢ against an unchanged thesis.
Pick 3 — KXTRUMPVH-26JUL10-T40.2 · BUY YES @ 0.78 limit · MEDIUM CONVICTION
"Will Trump's VoteHub approval polling average be above 40.2% at 10:00 AM ET on Jul 10, 2026?"
Mispricing thesis. The resolution source is public and machine-readable, and it currently reads 0.4pt above the strike with an uptrend. VoteHub's own API (polling.votehub.com/averages/trump_approval, updated today 16:00) shows:
- Approve = 40.6 on Jul 3, 4, 5 and 6 (four consecutive days), up from 39.3 on Jun 22 — a +1.3pt two-week uptrend.
- Daily-series volatility over the last 30 days: mean |daily change| 0.11pt, median 0.0, max 0.6. A NO requires a ≥0.4pt drop within 4 days — roughly a 4-sigma sequence of Trump-negative polls relative to recent behavior, against the current direction of travel.
- The average is step-like (moves only when new polls land), so with the reading pinned at 40.6 today the path to ≤40.2 by Friday 10 AM needs multiple sharply negative polls to enter at once.
Tail risks. (1) A batch of Trump-negative polls fielded over the NATO summit lands Wed–Fri (the Jul 5 grievance-spree coverage could poll badly). (2) VoteHub methodology tweak or an outlier heavyweight poll — its Jun 26 step was +0.4 in one day, so single-poll steps of the required size do occur, just rarely and lately upward. Priced at 89%, not higher, for exactly these reasons — this is a strong statistical lean, not a lock, hence MEDIUM.
Numbers. 90 contracts at ≤78¢ (est. avg fill 77.7¢: 1@75, 25@77, 64@78) = $69.90 (7.0% — at the MEDIUM cap). Max payout $90; EV +11.3¢/contract ≈ +$10 (+14%).
Liquidity / entry context. yes_bid 73 / yes_ask 75, but the ask is 1 contract; ~90 contracts fillable at ≤78; vol24h 978 (below the formal screen — flagged); OI 2,416. Slippage vs ask ≈ 2.7¢, inside the 3¢ rule but only just — use the limit, accept partial fills.
Price history. 49–57¢ on Jul 3 → 73–75 today, i.e. the market has been converging to the data for 72h. The residual 11–14¢ against an 89% mechanical read is the edge; it is smaller than it was Friday, and honesty requires noting we are riding a move, not anticipating one.
Pick 4 — KXKNESSET-27-AUG01 · BUY YES @ 0.78 limit · MEDIUM CONVICTION
"Will the Israeli Knesset be dissolved before Aug 1, 2026?"
Mispricing thesis. Dissolution is procedurally teed up, unanimously supported when voted, scheduled before the deadline on both competing timetables, and now personally in Netanyahu's interest.
- The government-backed dissolution bill passed its preliminary reading 110–0 (May 20; JPost) and first reading 106–0 (Jun 1–2; Times of Israel).
- Speaker Ohana, coalition whip Katz and Knesset legal adviser Afik all point to Jul 17 dissolution → Oct 27 election (ToI, Jul 5); Afik holds the pre-election recess must start 100 days out, making Jul 16 the last working day.
- The fallback fight — UTJ pushing recess to Jul 27 — is also before Aug 1 (Matzav, Jul 5).
- Netanyahu's camp is pushing formal dissolution (not mere recess) to block a constructive no-confidence vote during the campaign — aligning the PM's personal survival with the bill's final readings (same source).
Tail risks. (1) The market needs formal dissolution: if the Haredi legislative package (Basic Law: Torah Study, draft-arrest freeze, kashrut) stalls, UTJ withholds final-reading support and the Knesset could slide into the 100-day recess without ever dissolving — the main NO path, and why this is 85% not 95%. (2) A war-driven postponement reshuffling the calendar past Aug 1. Note the price already jumped ~55→77¢ on the Jul 5 timetable reporting; the residual edge is the mechanism risk the market still overweights.
Numbers. 90 contracts at ≤78¢ (est. avg fill 77.4¢: 52@77, 38@78) = $69.70 (7.0% — at the MEDIUM cap). Max payout $90; EV +7.6¢/contract ≈ +$7 (+9.8%).
Liquidity / entry context. yes_bid 74 / yes_ask 77; ~310 contracts fillable at ≤78; vol24h 1,100 (below the formal screen — flagged); OI 3,892. Slippage ≈ 0.4¢.
Price history. Ranged 51–65¢ through late June, whipsawed 35–84 on Jul 4, settled 75–77 after the Jul 5 ToI report. We are paying up post-news for the residually-underpriced procedural finish.
4. Recommended $1,000 portfolio
| Pick | Side | Limit ¢ | Contracts | Cost $ | Conviction / band (sets size) | Max payout $ | EV ¢/ct | EV % |
|---|---|---|---|---|---|---|---|---|
| KXTRUMPPASSPORT-26-JUL20 | YES | 76 | 190 | 143.90 | HIGH · favorite 60–90¢ (cap 15%) | 190.00 | +17.3 | +22 |
| KXLAGODAYS-26JUL-0 | YES | 91 | 110 | 100.10 | HIGH · deep favorite >90¢ (held under cap) | 110.00 | +4.0 | +4.4 |
| KXTRUMPVH-26JUL10-T40.2 | YES | 78 | 90 | 69.90 | MEDIUM · favorite 60–90¢ (cap 7%) | 90.00 | +11.3 | +14 |
| KXKNESSET-27-AUG01 | YES | 78 | 90 | 69.70 | MEDIUM · favorite 60–90¢ (cap 7%) | 90.00 | +7.6 | +9.8 |
| Total deployed | 480 | 383.60 | 38.4% of capital | 480.00 | +14.2 blended | |||
| Cash held | $616.40 (61.6%) — cash is a position; the category is efficient this week and v3 does not pad thin edges | |||||||
EV cents / EV % are recorded for calibration only — per v3 they did not drive contract counts. Sizing came exclusively from conviction tier + entry band, then cluster caps. Dollar edge (sum of EV): ≈ +$54 on $384 deployed.
Cluster exposure (cap: 15% of capital per underlying thesis)
| Cluster | Picks | Cost $ | % of capital | Cap |
|---|---|---|---|---|
| trump-passport-rollout | 1 | 143.90 | 14.4% | 15% |
| trump-summer-travel | 1 | 100.10 | 10.0% | 15% |
| trump-approval-early-july | 1 | 69.90 | 7.0% | 15% |
| knesset-dissolution | 1 | 69.70 | 7.0% | 15% |
One pick per cluster by construction: the correlated legs (KXLAGODAYS-26JUL-1, the other KXAPRPOTUS rungs) were rejected rather than stacked — the exact failure mode of the v1 correlated-loss episode.
Conviction exposure
| Tier | Picks | Cost $ | % of deployed | Per-pick cap |
|---|---|---|---|---|
| HIGH | 2 | 244.00 | 63.6% | $150 (15%) |
| MEDIUM | 2 | 139.60 | 36.4% | $70 (7%) |
| LOW | 0 | 0.00 | 0% | $30 (3%) |
Risk profile
- Most likely outcome (all four win, joint ≈ 67% treating theses as independent): payout $480 on $384 → +$96.
- Expected value: ≈ +$54 (+14.2% on deployed, +5.4% on total capital) over 4–26 days.
- Realistic bad case: both MEDIUMs lose, HIGHs win → −$139.60 + $56.10 = −$83.50 (−8.4% of capital).
- Largest single-event loss: passport pick fails → −$143.90 (−14.4%); by construction no single thesis can exceed 15%.
- Absolute worst case (every pick to zero, joint probability ≈ 10⁻⁴): −$383.60. Cash reserve $616.40 is never at risk.
- Concentration note: three of four picks are Trump-adjacent but mechanically independent (passport logistics ⊥ travel schedule ⊥ poll averages); the correlation channel (a catastrophic Trump-specific shock hitting all three) is real but remote inside these windows.
Execution notes
- Limits, not market orders. Books are thin: passport ask is 21 contracts, VoteHub ask is 1. Rest at the stated limits; accept partial fills. Do not chase above limit — each limit already contains the ≤3¢ slippage budget.
- Invalidation triggers. Passport: any report of an injunction, recall, or issuance pause → exit at market. Mar-a-Lago: any credible report of a scheduled Trump Florida trip (esp. Miami WC quarterfinal Jul 11 or third-place match Jul 18) → exit. VoteHub: reading ≤40.4 on Jul 8–9 (checkable at polling.votehub.com) → cut. Knesset: reporting that the coalition will take recess without final readings, or the Haredi deal collapsing → cut.
- Watchlist (no capital). KXMAXSHIPSHORMUZ-26JUL31-AL50 — PortWatch updates Tuesdays ~9 AM ET; if the Jul 7 release shows a ≥45 day in the Jun 29–Jul 5 window, YES below 70 becomes deployable. KXEOWEEK-26JUL11-0 — a single EO signing by Wed makes the remaining rungs of that ladder interesting.
- No hedges needed at these sizes; the natural hedge is the 61.6% cash book.
5. What I rejected and why
Every Stage-2 survivor that didn't become a pick is machine-logged in picks.json and shadow-tracked to settlement — if the rejects outperform the picks, the selection screen adds nothing, and we want to know that. Rejections cut by the v3 entry-band screen are marked [band].
- KXMAXSHIPSHORMUZ-26JUL31-AL50 (would-be YES @ 62¢, model 65%). Primary PortWatch data (ArcGIS feed) shows June already printed 52 and 51 transit-call days (Jun 24–25), proving the threshold attainable, and 31 July draws remain from a spiky, convoy-driven distribution — but the last print is 27/day, early-July Kpler counts run 13–25, and Iran's Jul 5 fee announcement adds friction. A 3¢ modeled edge on a market that already repriced −27¢ on the same data is inside estimation error. Efficient, not mispriced.
- KXEOWEEK-26JUL11-0 (would-be YES @ 39¢, model 57%) [band]. Federal Register data: EOs arrive in clumps (2–3 at a time), 4 of the last 9 weeks were zero, and none has been signed since Jun 25; the NATO trip removes two workdays this week. My 57% vs 39¢ is a real lean and an 18¢ paper edge — but it sits in the 35–60¢ coin-flip band, which v3 only permits at HIGH conviction, and a clumpy Poisson process can never be HIGH. This is precisely the trade that bled the v1/v2 book. Logged and walked away.
- KXTRUTHSOCIAL-26JUL11-T220 (would-be NO @ 16¢, model 30%) [band]. The market moved 25¢→86¢ within 24 hours of Trump's ~105-post Jul 5 spree (HuffPost/Daily Beast counts) — the YES edge was eaten before we arrived, and fading it means buying a sub-35¢ tail against a live hot streak where he needs only his baseline ~19–22 posts/day to clear. No lottery slot spent.
- KXTRUTHSOCIAL-26JUL11-B210 (would-be YES @ 15¢, model 18%) [band]. Threading the weekly count into a 21-post window is a tail with no informational edge.
- KXTRUMPPHOTO-26JUL12-5 (would-be NO @ 68¢, model ~70%). Getty tagging cadence during a summit-travel week is announcer-noise; any stated probability would be manufactured precision. Passed Stage 1 on volume, failed Stage 2 on modelability.
- KXAPRPOTUS-26JUL10-40.3 (would-be YES @ 44¢, model 43%) [band]. Live RCP average is 40.3 today, but it traversed 40.3–40.7 within the past week and the band is 0.3pt wide; the market has this one about right. Coin-flip band, no conviction.
- KXAPRPOTUS-26JUL10-40.6 (would-be YES @ 27¢, model 32%) [band] and -40.9 (would-be NO @ 87¢, model 90%). Small edges on rungs of the same underlying variable as the deployed VoteHub pick — stacking them re-creates correlated-ladder exposure for 3–5¢.
- KXLAGODAYS-26JUL-1 (would-be NO @ 93¢, model 95.5%). The same seasonal-closure thesis as Pick 2 wearing a different ticker; adding it would double the trump-summer-travel cluster for ~2.5¢ of edge. This is exactly the two-tickers-one-thesis pattern the 15% cluster cap exists to stop.
Also cut at Stage 1 (mechanical, not logged): ~260 markets on volume/spread/priced-out grounds — including every SCOTUS merits market (KXWATSONRNC, KXCHATRIEUSA, etc.: 5¢+ spreads or already picked in prior runs), all Senate-confirmation markets (near-zero volume), and 60+ contracts already live in users' feeds (duplicate-pick exclusion, e.g. the entire KXFABLERESTORE, KXHORMUZWEEKLY-26JUL05 and KXTRUMPWORLDCUP families).
6. Sources
- State Dept — Rubio remarks, Patriot Passport Launch reception (Jul 2, 2026)
- AFAR — Trump-themed passports issued starting Jul 6 (Jul 1, 2026)
- Forbes — issuance rules for the limited release (Jun 27, 2026)
- NPR — passport design unveiled (Apr 29, 2026) · Time (Apr 28, 2026) · Sen. King press release
- WaPo wire via Bangor Daily News — "final visit for the season" (May 19, 2026) · WFLX — six-month 2025 absence (Oct 18, 2025)
- Wikipedia — 2026 presidential trips · 2025 presidential trips
- VoteHub approval API (current) · VoteHub daily series API
- RCP live historical averages JSON (race 8656)
- Times of Israel — Knesset expected to dissolve Jul 17 (Jul 5, 2026) · ToI — first reading 106-0 · JPost — preliminary reading 110-0 · JPost — Haredi conditions deal (Jun 23) · Matzav — Netanyahu camp pushes dissolution law (Jul 5) · Haaretz — dissolution stalls (May 24)
- Federal Register — 2026 executive orders (signing dates via API) · whitehouse.gov presidential actions · Roll Call Factbase calendar
- HuffPost — Jul 5 posting spree (100+) · Daily Beast — 105-post count · Trump's Truth archive/stats
- IMF PortWatch — Strait of Hormuz chokepoint (daily counts pulled from the underlying ArcGIS feature service) · Bloomberg — convoy formation (Jul 1) · Bloomberg — MOL convoy exits (Jul 6)
- Kalshi mirror DB (read-only query API) — rules text, snapshots, settled results · Kalshi public API — live orderbooks (fetched 2026-07-06 ≈17:00–17:30 UTC)