Kalshi prediction model
A quantitative model for federally-regulated event contracts, evaluated in paper trading.
Paper trading
Summary
A quantitative model that produces forecasts for federally-regulated event contracts traded on Kalshi. The project is purely a technical exercise: building, testing, and evaluating prediction models within this market structure. Currently running in paper trading; no real positions, no live signals shared.
Why it exists
Event contracts as a market structure are interesting on their own: clean binary or scalar outcomes, transparent rules, real-time price discovery. Most traders bet the headline; the model bets the fine print. Resolution criteria are often written with gaps between contract language and trader interpretation — that’s where the signal lives.
How it works
Two LLM-powered signal engines run in a cheap-first cascade. A fast model (Haiku) runs base-rate decomposition on every filtered market. If it finds a meaningful gap against the market price, a slower model (Sonnet) parses the resolution criteria word-by-word for ambiguities. Signals are combined, run through Kelly sizing and veto gates, and posted to Discord if they clear the minimum edge threshold.
Output
Each opportunity surfaces as a structured embed with the model’s estimate, the market price, net edge after fees and slippage, recommended position size, and the reasoning chain. Every signal — including ones that don’t pass — is written to a SQLite audit log.
Rules Lawyer flagged: contract resolves YES only on a vote at the Sept 17–18 meeting. FOMC minutes show 7 of 12 members cited September as their threshold — market is pricing pre-meeting uncertainty, not the vote itself.
Stack
- Python 3.11
- Anthropic Claude Haiku + Sonnet signal engines
- Kalshi API CLOB + market data
- discord.py bot + slash commands
- SQLite signal audit log
- Railway deployment
Status
Paper trading. No real positions. No public signals or returns shared.
Nothing on this page is investment advice, a recommendation, or a representation of returns. This project is technical research.
Kalshi is the platform these contracts trade on. If you want to explore it yourself, you can sign up with my referral link. I may receive a referral bonus.