Bid-Ask Spread

Every Order Book on platforms like Kalshi and Polymarket displays the current best bid and best ask. When you submit a Market Order, you buy at the ask or sell at the bid, immediately paying the spread as a transaction cost. The Midpoint Price sits halfway between bid and ask and is often used as a fair-value reference. A wide bid ask spread signals low Liquidity, meaning fewer traders are actively quoting prices. During breaking news events, market makers may widen their spreads to compensate for uncertainty, making the cost of trading temporarily higher. Watching the spread before placing a trade helps you estimate the real cost of execution beyond any stated platform Trading Fees.

Spread width is one of the clearest indicators of Depth of Market. On high-volume markets, such as major election outcomes or Federal Reserve rate decisions, the spread on Kalshi or Polymarket can be as tight as one cent. On obscure or newly listed markets, spreads may be ten cents or wider, meaning you give up significant expected value the moment you trade. Slippage compounds the cost on large orders when your trade walks up the order book, filling at progressively worse prices. Traders focused on Expected Value must factor in the full round-trip spread cost before deciding whether a position has genuine Edge. Line Shopping across platforms can sometimes find better spread conditions for the same event.