Exchange Commission, in plain words
Exchanges and prediction markets do not build a margin into their prices the way sportsbooks do. They charge commission instead. Some take a share of your net winnings, charged only when you win. Others charge a fee on every trade, whatever happens.
On several venues the trade fee is largest near an even-money contract and smaller near the extremes, and it is rounded up to the cent. So a small order can pay a much larger fee per contract than a big one. The quoted price is a price nobody can actually trade at; the price after the fee is the real one.
Every edge comparison should use the price after fees. A contract that looks a point better than the best sportsbook can be a point worse once the fee is in. We read each venue's published schedule and price every exchange leg net of it before it can appear on a +EV, arbitrage or middles board.
The idea, drawn
Worked example · illustration
100 Kalshi contracts at 51 cents
- Contracts
- 100
- Fee
- $1.75
- Quoted
- −104
- After the fee
- −112
- The fee: 0.07 x 100 x 0.51 x 0.49, rounded up to the cent, is $1.75.
- Cost per contract: $0.51 plus $0.02 = 52.75 cents for a $1 payout.
- 52.75 cents for $1 is −112 as American odds.
Bet the exchange only when −112, not −104, beats every sportsbook price. Fee schedule read 2026-10-17; venues change them.