Cross-Market Arbitrage on Kalshi: Finding Mispricings Between Event Contracts and Traditional Prediction Markets
A sophisticated trader observes that Kalshi’s contract for “Will the Federal Reserve cut rates by June 2025?” is trading at $68, reflecting a 68% implied probability. Simultaneously, traditional betting markets price the same event at 62%, and financial derivatives suggest 65%. The discrepancy may represent genuine market inefficiency—a difference that can be exploited through careful