Event Contract
An event contract is a binary instrument that pays $1 if a specified event occurs and $0 if it does not. It is the tradable unit of a prediction market and the core instrument listed on Kalshi.
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Explained Simply
Each event contract resolves to one of two values at settlement: $1.00 if the event happened or $0.00 if it did not. Before settlement it trades anywhere in between, and that price is the market's implied probability of a 'yes' outcome. Because the payout is capped at $1, the price you pay on the 'yes' side is also your maximum risk per contract — you can lose the full amount if the event fails to occur. Contracts are written as clear yes/no questions with a defined resolution source and deadline, which is what makes them a prediction market's basic building block.
How an Event Contract Settles
Every event contract names a resolution source (an official result, data release, or ruling) and a deadline. At the deadline the market resolves the question, and each contract pays $1.00 for the winning side and $0.00 for the losing side.
You can hold either side: buying 'yes' profits if the event happens, buying 'no' profits if it does not. The two sides always sum to roughly $1.00 before fees, because exactly one outcome will be true.
Reading Price as Cost and Risk
The price of an event contract is both its cost and its maximum loss on that side. Buy a 'yes' at $0.40 and your maximum loss is $0.40 while your maximum gain is $0.60 (the $1 payout minus your cost).
Fees reduce the net figure on both winners and losers, so a contract's headline price understates the true cost of a round trip. Always account for fees before judging whether a price offers value.
Frequently Asked Questions
What does an event contract pay out?
A binary event contract pays $1.00 if the specified event occurs and $0.00 if it does not. Before settlement it trades between those values, and that price approximates the probability of a 'yes' outcome.
What is the most I can lose on an event contract?
On a single contract, your maximum loss is the price you paid, since the contract can only fall to $0.00. Buying 100 contracts at $0.40 risks $40 plus any fees.
How is an event contract different from a stock?
A stock has open-ended value and no expiry, while an event contract is binary and settles to $1 or $0 on a fixed date. That makes its price a direct probability estimate rather than a claim on future cash flows.
How Tradewink Uses Event Contract
Tradewink Predictions models each event contract as a probability between 0 and 1 so it can be compared with our own forecast. We use the fixed $1 payout to frame risk and expected value in plain terms, purely for educational purposes and with no performance promise.
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See Event Contract in real trade signals
Tradewink uses event contract as part of its AI signal pipeline. Get daily trade ideas with full analysis — free to start.