# Kalshi Politics — Mispricing Audit (v4, archetype-targeted) — 2026-08-20

Date: 2026-08-20
Source: https://kalshi-audits.pages.dev/2026-08-20-kalshi-politics-mispricing-audit-v4-r2

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# Kalshi Politics — Mispricing Audit (v4, archetype-targeted)

Report date 2026-08-20 · Horizon 45 days (to Oct 4) · Capital $2,500 · Universe: 120 pre-classified target series from targets.json (generated 2026-08-20 22:13 UTC)

New picks0
Logged rejects22
Deployed$0
Cash$2,500 (100%)
Precedent writebacks2

**Bottom line: an efficient week — cash is the position.** Every open market in the v4 Politics universe closing by Oct 4 was either a ≤5¢ tail, a ≥95¢ favorite, a zero-volume book, an existing live pick, or — for the only two candidates that survived all mechanical cuts (Bank of Israel Sept 1 decision, Bank of Japan Sept 17 decision) — a fairly-priced, informed book where the committed pre-market probability landed inside the spread. Under v4 rules (no-trade band from the live book, no <40¢ tails, no ≥90¢ favorites), no leg is deployable. Zero picks is the correct output, not a failure to find one.

## Stage 0 — Universe & mechanical cuts

All 120 allowlisted series were screened; 35 series had any plausible in-horizon activity and were swept live against the Kalshi public API (the DB mirror showed stale rows, so every filter number below is the live *_fp value). Only markets belonging to allowlisted series were considered. Findings:

- **Tier-1 in-horizon slate is structurally empty.** The big Tier-1 series (KXTRUMPADMINLEAVE, KXFEDERALCHARGE, KXARREST, KXTRUMPPARDON/S, KXSAVEACT, KXBILLS…) have no markets closing before Oct 5 — their open legs are Dec-2026/2027-dated. What does close in-window (KXIMPEACH Sep 1 at 0/1, KXALITOOUT Sep 1 at 0.1/0.6, KXKASHOUT Sep 1 at 2/3, KXLEAVEWALZ 0/1, KXLUXONOUT 2/3, KXZELENSKYYOUT 2/5) is all resolved-in-practice tails.
- **Survivors of all mechanical cuts (spread ≤5¢, 5<price<95, live vol24≥500):** KXCBDISRAEL-26AUG31-HOLD (84/86, vol24 3,190), KXCBDECISIONJAPAN-26SEP17-H25 (83/87, vol24 1,791), KXCBDECISIONJAPAN-26SEP17-HOLD (12/17, vol24 821), and KXKASHOUT-26JUL-26OCT01 (8/9, vol24 509 — both sides band-forbidden).
- KXLOCALLAW-CAJEWISH-26OCT01 (80/82) looked like the one interesting Tier-1 confirmation/enact leg, but live vol24 = 0 — the series' snapshot volume belonged to the 98¢ KCROYALS leg. Hard-floor reject; the zero-volume cohort is the documented phantom-edge graveyard.
- No Mentions markets surfaced; no close-after-expiration or inside-3h violations among survivors.

## Stage 1–2 — Precedents & diligence on the two real candidates

scheduled-processTier 2REJECT — inside spread

### KXCBDISRAEL-26AUG31-HOLD — Bank of Israel maintains rate at the "August" meeting

**Prob: 82% pre-market → 83% final** vs a 84/86 book (only 20 contracts at the 86¢ ask). **Precedent:** KXFEDDECISION-26JUL-H0 resolved YES — "buy the hold rung when a hawkish repricing has knocked it well below par" — but here the hold rung sits _at_ par, not below it.

**The load-bearing fact (primary source):** Reuters, July 6 — "The Bank of Israel also said it had moved its next rates decision to September 1 from a planned August 31." The Kalshi market was listed July 5 (one day before the move was announced), still shows expected expiration Aug 31 13:00 GMT, and its delay clause reads "delayed past the expiration date → No change resolves Yes." A strict expected-expiration reading would make HOLD a mechanical YES. But the operative contract "expiration date" is almost certainly the formal expiration_time of Sep 7 — a Sep 1 announcement lands inside it, so the market settles on the actual decision. Both Kalshi (84/86) and Polymarket (84/85) price pure hold-vs-cut odds, i.e. the crowd shares that reading. I credited the mechanical reading ~15–20%, worth only ~2pts of optionality.

**Base case:** after two consecutive cuts to 3.50% (July 6), consensus expects a hold, but Governor Yaron told Bloomberg on Aug 18 the meeting "will be a live one," with inflation at ~1.8–1.9%, a strong shekel and cheap oil all arguing for a third cut. I put hold at ~80%. Final 83 sits inside the 84/86 spread — no YES edge at the ask, and the NO side would be a forbidden 16¢ tail. **Resolver deductions:** −2 rulebook-reading ambiguity (net positive to YES, so not disqualifying). Reject, reason: inside spread.

scheduled-processTier 2REJECT — inside spread

### KXCBDECISIONJAPAN-26SEP17-H25 — BOJ hikes 25bps on Sept 17–18

**Prob: 75% pre-market → 78% final** vs an 83/87 book (vol24 1,791, OI 22,248). **Precedent:** KXFEDDECISION-26JUL-H25 resolved NO after a 11%→38% hawkish repricing — "a hawkish repricing into a live meeting is a fade candidate rather than a signal."

**Evidence:** BOJ held at 1.0% on July 31 but warned core inflation will run "clearly above" 2% from H2 FY2026 (CNBC), Ueda was read as mildly hawkish (Bloomberg), and on Aug 14 Reuters sources said the BOJ is "eyeing a September rate hike and a faster pace of tightening." Unlike the July FOMC case, this repricing is the central bank's own leak, so I put a hike well above coin-flip — but a month of yen, equity and political risk (a hike-averse PM) separates the leak from the vote, and BOJ has a long record of letting hawkish expectations slip a meeting. My 78 is below both the 87 ask and the 83 bid's implied floor for a YES entry; the NO side is a forbidden 17¢ tail. The specialist-dense book already ate the leak. Reject, reason: inside spread. The HOLD leg (12/17) is the same cluster's runner-up and a banned tail.

## Stage 3–4 — Rejects log (all 22)

| Ticker | Archetype | Side | Px | Model % | Cluster | Reason |
|---|---|---|---|---|---|---|
| KXCBDISRAEL-26AUG31-HOLD | scheduled-process | YES | 86 | 83 | boi-sep1-decision | Inside spread (84/86); NO side a 16¢ tail; Sep-1 meeting move adds only ~2pts delay-clause optionality |
| KXCBDECISIONJAPAN-26SEP17-H25 | scheduled-process | YES | 87 | 78 | boj-sep17-decision | Inside spread; Aug 14 Reuters leak fully priced; FOMC-July precedent warns off the ask |
| KXCBDECISIONJAPAN-26SEP17-HOLD | scheduled-process | YES | 17 | 20 | boj-sep17-decision | Tail band (<40¢); cluster runner-up |
| KXKASHOUT-26JUL-26OCT01 | departure/ouster | NO | 92 | 7 | kash-patel-out | No playable band: NO 92¢ (≥90 reject), YES 9¢ tail; model agrees with book anyway |
| KXKASHOUT-26APR-26SEP01 | departure/ouster | — | 3 | — | kash-patel-out | Tail: YES ask 3¢ |
| KXLOCALLAW-CAJEWISH-26OCT01 | confirmation/enact | — | 82 | — | ca-jewish-ethnicity-bill | Zero-volume book: live vol24 = 0 (hard 500 floor) |
| KXLOCALLAW-KCROYALS-26OCT01 | confirmation/enact | — | 98 | — | kc-royals-stadium | Deep favorite: bid 98 |
| KXLOCALLAW-CAAANG-26OCT01 | confirmation/enact | — | 97 | — | ca-angels-naming-bill | Deep favorite: bid 97; vol24 211 |
| KXIMPEACH-26-SEP01 | legal-action | — | 1 | — | trump-impeach | Tail: YES ask 1¢ |
| KXALITOOUT-26SEP01 | departure/ouster | — | 1 | — | alito-retire | Tail: YES ask 0.6¢ |
| KXMAMDANIEO-26AUG22-T0 | confirmation/enact | — | 1 | — | mamdani-eo-weekly | Tail: YES ask 1¢; 3 days to weekly close |
| KXCBDISRAEL-26AUG31-C25 | scheduled-process | — | 19 | — | boi-sep1-decision | vol24 105 < 500; tail band; cluster runner-up |
| KXCBDECISIONCANADA-26SEP-H0 | scheduled-process | — | 99 | — | boc-sep-decision | Deep favorite 99/100; vol24 0 |
| KXNJGOLFVISITCOUNT-26AUG-3 | multi-news-other | — | 76 | — | nj-golf-count | vol24 120 < 500; continuous-number thesis (trip-count pace) |
| KXIPOANTHROPIC-DATE-26OCT01 | corporate-event | NO | 60 | — | anthropic-ipo-date | Already an active pick (39/41 book, vol24 41,930) |
| KXPIRROOUT-26AUG-26SEP01 | multi-news-other | NO | 93 | — | pirro-dc-exit | Already an active pick |
| KXHEGSETHOUT-26APR-SEP01 | multi-news-other | NO | 97 | — | hegseth-out | Already an active pick; now also ≥95 deep favorite |
| KXUSAIRANAGREEMENT-27-26OCT | scheduled-process | — | 2 | — | us-iran-deal | Tail: YES ask 2¢ |
| KXIPOOPENAI-26OCT01 | corporate-event | — | 2 | — | openai-ipo | Tail: YES ask 2¢ |
| KXCOMPANYACTIONMERGER-27-26OCT01 | corporate-event | — | 5 | — | tesla-spacex-merger | Tail 5¢ / deep-favorite NO |
| KXLUXONOUT-26AUG-26SEP01 | departure/ouster | — | 3 | — | luxon-out | Tail: YES ask 3¢ |
| KXZELENSKYYOUT-26OCT01 | departure/ouster | — | 5 | — | zelenskyy-out | Tail: YES ask 4.6¢ |

Px = live price of the side shown (YES price where no side was formed). Stage-0 mechanical cuts carry no side/probability by design.

## Portfolio

| Position | Cost | % of capital |
|---|---|---|
| CASH No deployable edge this run | $2,500 | 100% |

Cluster table, conviction-exposure table and EV table are trivially empty (0 picks). Reserve requirement (≥10%) trivially satisfied. The 14 existing live picks are untouched; none reappears above as a new pick.

## Precedents consulted & written back

- **Consulted:** KXFEDDECISION-26JUL ladder (all five legs, resolved 2026-07-29) — hold won through a 11%→38% hawkish repricing; "buy the hold rung when knocked below par," "fade hawkish repricings into live meetings." Applied to both CB candidates; neither hold rung was below par this week. KXHORMUZ rows reviewed and set aside (different resolver family). No prior KXCBDISRAEL / KXCBDECISIONJAPAN rows existed in the store.
- **Written back (2 rows, settled markets, verified this run):** KXCBDISRAEL-26JUL06-C25 (the July 6 cut to 3.50% + the BOI's own announcement moving the next decision from Aug 31 to Sep 1 — with the delay-clause vs. formal-expiration reading the next run must check at settlement of the 26AUG31 event) and KXCBDECISIONJAPAN-26JUL30-HOLD (July 31 hold at 1.0% with hawkish guidance; the Aug 14 Reuters leak repriced the Sept H25 leg to ~85% a month out).

## Execution notes

- The single number to watch before the next run: **whether Kalshi settles KXCBDISRAEL-26AUG31 on the Sept 1 decision or via the delay clause**. That settlement pins the "expiration date" reading for every future rescheduled-meeting CB market and is logged in the precedent writeback.
- If BOI cut odds rise materially before Aug 31 close (Yaron called the meeting "live"), the HOLD leg could dip back into the 60–84¢ core band with real edge; it would be a fresh candidate next run, not a chase now.
- BOJ Sept 17 stays specialist-dense; the only entry that would ever clear v4 bands is YES H25 at ≤my prob, which requires either a price dip toward 78 or new primary-source confirmation (e.g., a second sources-leak or a hawkish Ueda speech) that lifts the committed probability above the ask.

Data: Kalshi public API (live *_fp/*_dollars quotes, orderbook depth), kalmari mirror (rules, precedent store; mirror rows were stale and were not used for any filter number), Reuters/Bloomberg/CNBC/Globes/Times of Israel primary reporting. Sources: [Reuters via Investing.com (BOI July 6)](https://www.investing.com/news/economy-news/bank-of-israel-cuts-key-rate-by-25-bps-as-usiran-ceasefire-pushes-down-energy-prices-4776948), [Bloomberg (Yaron, Aug 18)](https://www.bloomberg.com/news/articles/2026-08-18/israel-s-central-bank-chief-says-next-rate-decision-is-live), [CNBC (BOJ July 31)](https://www.cnbc.com/2026/07/31/boj-rates-yen-intervention-inflation-japan.html), [Reuters via KFGO (BOJ leak, Aug 14)](https://kfgo.com/2026/08/14/boj-eyeing-september-rate-hike-faster-pace-of-tightening-sources-say/).