# Kalshi Politics — Mispricing Audit (v4, archetype-targeted) — 2026-08-21

Date: 2026-08-21
Source: https://kalshi-audits.pages.dev/2026-08-21-kalshi-politics-mispricing-audit-v4

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# Kalshi Politics — Mispricing Audit

v4 (archetype-targeted, precedent-fed) · Report date 2026-08-21 · Horizon 45 days · Capital $2,500 · Focus category: Politics

New picks0
Capital deployed$0
Cash position100%
Logged rejects16

## Verdict

**Zero picks this week — and that is the correct output, not a failure of the scan.** The Stage-0 universe (70+ allowlisted series, 101 open markets inside the 45-day horizon) collapsed to just 8 mechanical survivors, of which 2 are already-live picks. Of the 6 genuine candidates, every single one has its playable side outside the v4 entry bands: the two central-bank events offer only sub-40¢ tails or ≥88¢ asks with no edge, and the two "sure thing" NO trades (Kash Patel, Tesla/SpaceX merger) sit in the banned ≥90¢ deep-favorite band. 40–70% cash is expected in an efficient week; this week it is 100%.

**The finding of the week is a shadow trade, not a live one.** Kalshi prices a September BOJ hike at 88–90¢ while 3-month TONA futures — institutional money on the same question — implied only ~53.2% as of Aug 20 (centralbank.watch). Our blended model says ~68%. The fade (NO on the hike leg at ~12¢) carries roughly a 20-point shadow edge but is a <40¢ tail, which is 0-for-8 lifetime and hard-banned. It is logged as a reject and will shadow-track; if this class of institutional-vs-retail divergence keeps showing paper profit, that is evidence for a future band revision — through the methodology, not through an exception tonight.

## Stage 0 — Universe funnel

- **101** open markets in allowlisted series closing before Oct 6, 2026 (from targets.json, generated 2026-08-21T16:06Z).
- **93** cut mechanically on live public-API data: 24h volume < 500 (the dominant cut — the zero-volume phantom-edge cohort), spread > 5¢, YES bid ≥ 95¢, YES ask ≤ 5¢, or pre-resolution windows.
- **8** survivors → **2** excluded as existing picks (Anthropic IPO Oct NO, Pirro Sep NO) → **6** to Stage 1/2 diligence.
- Notable near-miss: the FY27 funding ladder (KXGOVTFULLFUND) has its Sep-26 leg at 72–75¢ — the only in-band price on the whole slate — but live 24h volume of 396 (re-checked twice) is under the hard 500 floor, and the other four legs trade essentially zero.

## Candidates worked (Stage 1–3)

scheduled-processREJECTED — bandcluster: boj-sep-2026-decision

### Bank of Japan, September 17–18 meeting (KXCBDECISIONJAPAN-26SEP17)

**Precedents consulted:** KXCBDECISIONJAPAN-26JUN15-H25 resolved YES with swaps at ~72.6% ("BoJ moves arrive telegraphed through deputy-governor speeches and press leaks"); -26JUN15-HOLD resolved NO ("price hold legs off the signalling, not the bank's no-show history"); -26JUN15-H25P ("BOJ normalizes strictly in 25bp steps — the >25bp rung is a structural zero"); KXFEDDECISION-26JUL-H25 ("a hawkish repricing into a live meeting is a fade candidate — dissent, not a rate move, is how the Committee vents pressure").

**Diligence:** BOJ held at 1.00% on July 31 with a Takata dissent proposing 1.25% and a warning that core inflation will run "clearly above" 2% (CNBC). A Reuters sources story (Aug 14) says the BOJ is "set to hike as soon as September" and to accelerate its tightening pace. Against that, 3-month TONA futures implied only **53.2%** for a September move as of Aug 20.

**Prob: 65% pre-market → 68% final** (hike; nudged toward the liquid Kalshi book, anchored on TONA). Live book: H25 leg 88¢ bid / 90¢ ask, vol24h 2,511, OI 23,726.

**Why rejected:** Our 68% sits far below the 88¢ bid, so the live side is NO — at a 12¢ effective entry, inside the banned <40¢ tail band. The HOLD leg (YES at 12¢ ask) is the same thesis and additionally has 0.26 contracts of ask depth. The YES-hike side at 90¢ ask fails both the ≥90¢ rule and the edge test. All four expressions reject; the ~20pt NO-side divergence is logged for shadow-tracking.

scheduled-processREJECTED — band / no edgecluster: boi-aug31-2026-decision

### Bank of Israel, August 31 decision (KXCBDISRAEL-26AUG31)

**Precedents consulted:** No series-specific rows in the store (cold derivation noted; July 6 meeting written back this run). Archetype rows (KXFEDDECISION, ladder mechanics) applied. Rules clarification common to all CB ladders: a cancelled/delayed meeting pays the HOLD leg.

**Diligence:** BOI cut 25bps to 3.50% on July 6 — its second consecutive cut and third of 2026 (BOI press release, Globes). Most forecasters expect a hold on Aug 31, but Governor Yaron said on Aug 18 the meeting "will be a live one" (Bloomberg). Inflation ~1.9%, inside target; BOI's own path sees ~3.0% in 12 months. Polymarket: 86% hold / 13% cut.

**Prob: 80% pre-market → 83% final** (hold; blended toward two agreeing liquid books). Live book: HOLD 87/88, vol24h 3,006, OI 19,161; C25 10/13, vol24h 514.

**Why rejected:** The only in-band expression is YES-hold at 88¢ ask, which needs >88% — our 83% says no edge (and the governor's "live" comment is exactly the kind of specific signal that caps a thin favorite). The NO-hold and YES-cut sides are 13¢ tails, <40¢ band; the cut leg's nominal 2¢ edge dies inside the 3¢ slippage allowance. No bet.

departure/ousterREJECTED — deep favoritecluster: kash-patel-out

### Kash Patel out as FBI Director before Oct 1 (KXKASHOUT-26JUL-26OCT01)

**Precedents consulted:** KXKASHOUT-26APR-JUN01 and -JUL01 both resolved NO — "anonymous 'matter of time' sourcing is not a resolution event; nothing short of an actual vacancy pays," and "far rungs of monthly departure ladders are the most systematically overpriced." Rules require an actual departure date and vacating the role.

**Prob: ~94% NO pre-market → 94% final.** Book: YES 7/8, vol24h 534, OI 12,735. Precedent and price agree — but NO entry is 93¢, in the banned ≥90¢ band (max win 7.5% of risk; one resolver surprise erases ten wins). Rejected on band, not on thesis.

corporate-eventREJECTED — deep favoritecluster: tesla-spacex-merger

### Tesla/SpaceX definitive merger before Oct 1 (KXCOMPANYACTIONMERGER-27-26OCT01)

**Diligence:** Rules demand an unambiguous, affirmative confirmation of a definitive signed agreement through official channels; Musk hypotheticals explicitly do not count. No such agreement exists or is pending. **Prob: ~99% NO.** Book: YES 4/6, vol24h 4,378. NO entry 96¢ — ≥90¢ hard reject. The Sep-01 sibling leg failed Stage 0 (ask ≤5¢).

## Reject log (16)

| Ticker | Side | Px | Model % | Reason |
|---|---|---|---|---|
| KXCBDECISIONJAPAN-26SEP17-H25 | NO | 12 | 32 | <40¢ band; TONA ~53% vs 88–90¢ book — shadow-tracked |
| KXCBDECISIONJAPAN-26SEP17-HOLD | YES | 12 | 32 | <40¢ band + no ask depth (0.26 contracts); cluster runner-up |
| KXCBDISRAEL-26AUG31-HOLD | NO | 13 | 17 | <40¢ band; in-band YES has no edge (83% < 88¢ ask) |
| KXCBDISRAEL-26AUG31-C25 | YES | 13 | 15 | <40¢ band; 2¢ edge inside slippage |
| KXKASHOUT-26JUL-26OCT01 | NO | 93 | 94 | Deep-favorite band (≥90¢) |
| KXCOMPANYACTIONMERGER-27-26OCT01 | NO | 96 | 99 | Deep-favorite band (≥90¢) |
| KXIPOANTHROPIC-DATE-26OCT01 | NO | 53 | — | Already an active pick |
| KXPIRROOUT-26AUG-26SEP01 | NO | 94 | — | Already an active pick |
| KXGOVTFULLFUND-26AUG-26SEP26 | — | 74 | — | vol24h 396 < 500 floor (only in-band price on the slate) |
| KXHEGSETHOUT-26APR-SEP01 | — | 4 | — | Existing pick + ask ≤5¢ |
| KXUSAIRANAGREEMENT-27-26SEP | — | 1 | — | ask ≤5¢ (both legs) |
| KXNJGOLFVISITCOUNT-26AUG-3 | — | 78 | — | vol24h < 500; continuous-count thesis |
| KXLOCALLAW-KCROYALS-26OCT01 | — | 98 | — | bid ≥95¢ |
| KXMAMDANIEO-26AUG22-T0 | — | 1 | — | ask ≤5¢; pre-resolution window |
| KXCBDECISIONCANADA-26SEP-C25 | — | 25 | — | vol24h < 500 across ladder |
| KXEBOLACOUNTRY-OCT26-CAR | — | 12 | — | spread >5¢ (whole 16-leg ladder) |

## Portfolio & risk

| Cluster | Legs deployed | Cost | Note |
|---|---|---|---|
| — (none) | 0 | $0 | All candidates rejected at Stage 3/3.5 |
| **Cash** | — | **$2,500** | 100% of capital; reserve requirement trivially met |

Conviction exposure: HIGH $0 / MEDIUM $0. EV-for-the-record: $0 deployed; the largest foregone shadow edge is BOJ-Sep NO-hike (~+20¢/contract at 12¢ entry, banned band). Execution notes: n/a — no orders.

## Precedent writeback

Two settled markets in target series were reconstructed and verified this run and written to precedents.json:

- KXCBDECISIONJAPAN-26JUL30-HOLD — July 31 hold at 1.00% with a Takata dissent for 1.25%; lesson: dissent + inflation warning is the telegraph for the _next_ meeting, but cap the next hike leg near what TONA implies.
- KXCBDISRAEL-26JUL06-C25 — July 6 cut to 3.50%, second consecutive; lesson: this BOI cuts back-to-back, and the governor's "live meeting" language keeps 85¢+ hold legs two-sided.

## Method note

Keel v4: Stage-0 allowlist universe (targets.json), probability committed before opening the book, precedent retrieval from resolution_precedents, resolver-verdict forecasting with priced deductions, book-derived no-trade band, 40–84¢ core band (85–89¢ half-size, ≥90¢ and <40¢ banned), one leg per cluster, live-book liquidity floor of 500 contracts/24h, conviction-capped EV-agnostic sizing. Cash is a position; zero picks is a valid and expected outcome in an efficient week.