Position

Opening a position means acquiring shares in a prediction market outcome. On Kalshi, buying YES shares through a Limit Order or Market Order creates a long position: you pay the purchase price now and will receive $1.00 if the market resolves YES, or $0.00 if it resolves NO. Buying NO shares creates a short position on the YES outcome. Closing a position means selling your shares back into the Order Book before Settlement. If you bought YES shares at 40 cents and sell them at 60 cents, you lock in a 20-cent gain per share. If you hold through resolution, you receive the full settlement Payout of $1.00 (YES) or $0.00 (NO). Mark-to-Market accounting tracks your unrealized gain or loss as the Contract Price moves.

Position sizing is the decision of how many contracts to hold relative to your bankroll. Holding too large a position relative to total capital creates ruin risk even if your Edge is positive. The Kelly Criterion provides a mathematically optimal sizing formula based on your estimated Edge and the Implied Probability of each outcome. Practical traders often use fractional Kelly to reduce variance. Positions across multiple markets interact: if two markets are correlated (for example, two elections in the same country), your total exposure to one political outcome may be larger than any single position appears. Monitoring aggregate exposure by theme or event type is an important part of Bankroll Management on platforms like Polymarket and Kalshi.