Settlement Bounds

Certain markets have a scalar payout and can be partly determined before the event ends. The settlement floor is the minimum payout per contract to YES holders.

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Example

A government shutdown market settles at $0.10 for each day the shutdown lasts, up to 10 days. After 3 days, Kalshi may raise the settlement floor to the guaranteed payout of $0.30.

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Fields

Markets include settlement_bounds_type, which is default or floor. default means Kalshi will never apply a settlement floor to the market. Markets in events with a collateral_return_type of MECNET or DIRECNET are always default. Markets of type floor also include settlement_floor_dollars. It starts at $0 when the market is created.

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How It Works

• Kalshi raises the floor when part of the outcome becomes certain.
• YES holders’ available balance goes up by the floor increase times their contracts.
• The floor does not affect a NO holder’s available balance.
• Buying YES releases collateral equal to the floor. Available balance goes down by the price minus the floor.
• Selling held YES contracts raises available balance by the price minus the floor.
• Orders must have a YES price above the floor. A NO price must be below $1 minus the floor.
• After a raise, resting orders with a YES price at or below the new floor are canceled. For NO orders, that is a NO price at or above $1 minus the new floor.
• At settlement, YES holders receive the value the market settles at minus the floor, per contract. NO holders receive $1 minus the value the market settles at.
• This applies only to members who trade directly with Kalshi. For FCM members, the floor never changes available balance. At settlement, they receive the full value per YES contract.

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Lowering the Floor

In rare cases, Kalshi may lower the settlement floor due to a settlement source correction.

• YES holders’ available balance goes down by the floor decrease times their contracts.
• NO holders’ available balance does not change.
• Resting orders a subaccount can no longer pay for are canceled. This can include orders in other markets.

If a subaccount’s available balance goes negative, Kalshi first covers it from the member’s other subaccounts. Any amount left stays as a negative balance on the primary subaccount. A subaccount with a negative balance cannot place any orders, including orders that close a position. It can trade again once its balance is back to zero.

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Worked Example

This uses the shutdown market. Fees are left out.

1. The floor is $0. Member A buys 100 YES at $0.40. A’s available balance goes down by $40. Member B buys the other side: 100 NO at $0.60. B’s available balance goes down by $60.
2. After day 3, Kalshi raises the floor to $0.30. A’s available balance goes up by $30. B’s does not change.
3. A sells 50 YES at $0.45 to member C. A’s available balance goes up by $0.45 minus the $0.30 floor, times 50: $7.50. C’s goes down by the same $7.50.
4. The shutdown ends after 5 days. The market settles at $0.50.
5. A and C each hold 50 YES. Each gets $0.50 minus the $0.30 floor: $0.20 per contract, so $10.
6. B gets $1 minus $0.50: $0.50 per contract, so $50.

In total:

• A paid $40 and got back $47.50: $30 at the raise, $7.50 from the sale and $10 at settlement.
• C paid $7.50 and got back $10.
• B paid $60 and got back $50.