Event contracts vs futures: A comparison guide

(For more information, visit kalshi.com/perps.)

If you've come across event contracts and want to know how they compare to futures, the short answer is this: futures track price, event contracts track outcomes.

With a futures contract, your profit or loss depends on how far a price moves. Buy crude oil futures at $65 and sell at $70, and you make money proportional to that $5 move. There's no cap on how much you can gain — or lose.

With an event contract, none of that applies. You're not tracking a price. You're answering a yes or no question: will this event happen? If you're right, the contract pays $1. If you're wrong, it pays $0. Your maximum loss is exactly what you paid to open the trade — nothing more, regardless of how the market moves. You’re also able to exit your position early. There is no need to ride it out until the contract resolves.

That single difference — fixed binary payout versus variable price-based payout — drives almost everything else that sets these two instruments apart. Event contracts have no margin requirement, no margin call, and no leverage. Futures have all three.

This guide explains how each instrument works, what makes them different, and how to decide which one fits what you're actually trying to do.

An event contract lets you trade on the outcome of a specific, real-world event. Instead of tracking a price over time, you answer a simple yes or no question: will this event happen?

If your answer is correct when the contract settles, you receive $1. If you're wrong, the contract expires at $0. Your profit or loss is simply the difference between what you paid and the settlement value.

For example: a contract asks "Will the Fed hold interest rates at its next meeting?" The contract is trading at $0.65. You buy one contract for $0.65. If the Fed holds rates, the contract settles at $1 and you earn $0.35. If the Fed changes rates, it settles at $0 and you lose your $0.65. That's the full extent of your downside. There is no margin call, no additional exposure beyond what you paid.

Event contracts trade on CFTC-regulated exchanges called designated contract markets (DCMs).

Every event contract has three components:

The underlying event. This is the specific, verifiable outcome the contract is based on, what the temperature will be in a specific city, whether a Fed decision goes a certain way, or whether a specific economic data release hits a threshold. The contract is structured as a binary outcome. You buy "Yes" if you think the event will happen, or "No" if you think it won't.

The resolution time. Every event contract has an expiration — either a specific time or the natural conclusion of the event. Once the outcome is verified against a published data source, the contract settles and pays out.

You don't have to hold until settlement. You can buy and sell event contracts before expiration just like any other traded instrument, locking in a profit or cutting a loss based on how the contract price moves.

Event contract prices run between $0 and $1, and the price itself is a real-time measure of implied probability. A contract trading at $0.70 reflects roughly a 70% market-implied probability that the event will happen. A contract trading at $0.30 reflects a 30% implied probability.

This means both sides of a trade are always available at once. The "Yes" side and the "No" side together will roughly equal $1, since one of them has to be right. If "Yes" is trading at $0.70, "No" is trading at around $0.30.

Prices move as new information enters the market. A stronger-than-expected economic report, a breaking news event, or a shift in market sentiment can all push implied probability — and therefore the contract price — up or down in real time.

One of the most important features of event contracts is defined risk. The maximum you can lose on any trade is exactly what you paid to open it — nothing more.

This is fundamentally different from futures trading, where losses can exceed your initial deposit and margin calls can require you to post additional funds quickly. With event contracts, there is no margin requirement and no margin call. Your maximum loss is known before you place the trade.

This defined risk structure makes event contracts accessible to traders who want direct exposure to market-moving events without the complexity or open-ended downside of leveraged instruments.

Event contracts span a wide range of categories. The most actively traded include:

Economic data: Contracts tied to Fed rate decisions, inflation prints, jobs reports, and GDP releases. These attract traders with a view on macro outcomes.

Market-close levels: Contracts asking whether a major index — the S&P 500, Nasdaq, crude oil, gold — will close above or below a specific level by end of day. These are closely tied to underlying futures markets.

Elections and political events: Contracts on election outcomes, policy decisions, and government appointments. These are among the highest-volume markets on platforms like Kalshi.

Sports and entertainment: Contracts on game outcomes, award winners, and other pop culture events.

Weather: Contracts tied to temperature readings, storm categories, or precipitation thresholds.

Each category uses the same binary yes or no structure and the same defined risk mechanics.

Both event contracts and futures contracts are CFTC-regulated derivatives, but they work very differently. The right instrument depends on what you're trying to do.

Payout structure: Futures contracts have variable, open-ended payouts — your profit or loss depends on how far the price moves. Event contracts have fixed, binary payouts — you either receive $1 or $0 at settlement. This makes event contracts simpler to understand and easier to size.

Risk and margin: Futures require margin — a good faith deposit that can be subject to margin calls if the market moves against you. Event contracts are fully collateralized by your entry price. There is no margin requirement and no margin call. Your maximum loss is capped at what you paid.

Cost to enter: Futures contracts often require hundreds or thousands of dollars in initial margin. Event contracts typically cost between a few cents and just under $1, making them accessible with far less capital.

Time horizon: Event contracts are primarily short-term instruments, often settling within a single day or at the conclusion of a specific event. Futures contracts can be held for weeks or months and track continuous price movement over that time.

Leverage: Futures offer significant leverage — you control a large notional value with a small deposit. Event contracts carry no leverage. Your gain is capped at $1 minus your entry price, regardless of how strongly the event resolves in your favor.

Use case: Use an event contract when you have a yes or no view on a defined, scheduled outcome. Use a futures contract when you want directional exposure that scales with how far a price moves, or when you need to hedge an underlying position over time.

(For more information, visit kalshi.com/perps.)

^{This is not financial advice. Trading on Kalshi involves risk and may not be appropriate for all. Members risk losing their cost to enter any transaction, including fees. You should carefully consider whether trading on Kalshi is appropriate for you in light of your investment experience and financial resources. Any trading decisions you make are solely your responsibility and at your own risk. Information is provided for convenience only on an "AS IS" basis. Past performance is not necessarily indicative of future results. Kalshi is subject to U.S. regulatory oversight by the CFTC.}