How to read an event contract before you trade it: the terms, the fees and the CFTC filing

An event contract’s real terms are not the one-line question on the screen. On a CFTC-regulated exchange, each contract has written terms and conditions that the exchange files with the Commission, and they say exactly which number or result decides the outcome, who publishes it, when trading stops, what happens if the data is late, and what the contract pays. This guide shows how to read those terms, how fees and the order book add to the cost, and where to find the filing on the CFTC website.

For how event contracts work in general and the legal fight over them, see our explainer on prediction markets and event contracts. This guide is the practical companion. It uses one real filing as an illustration only; it is not a recommendation of any exchange or contract.

What the exchange has to file

An exchange can list a new event contract by self-certifying it under CFTC Rule 40.2, or ask the CFTC to approve it first. A self-certification must include a copy of the rules that set out the contract’s terms and conditions, the intended listing date, a certification that the contract complies with the Commodity Exchange Act and CFTC rules, and a concise explanation of how it complies, including with the core principles. The CFTC must receive it by the open of business on the business day before listing, and the exchange must post a copy on its own website at the same time. Parts it wants kept confidential may be redacted.

One core principle matters most for a trader reading the terms: an exchange may list only contracts that are not readily susceptible to manipulation. In a March 2026 advisory, CFTC staff said that where a contract can be listed in many permutations, they would expect the filing to identify the specific data source or sources used for settlement and assess how reliable, objective and manipulation-resistant they are, and warned that promising to settle on a consensus of sources still to be chosen may not be enough.

How to find a contract’s filing on the CFTC website

1. Open the CFTC’s Industry Filings page and, under Products, choose Designated Contract Markets (DCM).
2. Filter by Organization (each exchange has a short code), and by Category “Event” if you want only event contracts. Results show the product name, type, status (for example Certified or Withdrawn) and date. The same search covers every designated contract market’s event contracts, not just one exchange’s.
3. Open the entry. The associated documents can include the cover letter with the concise explanation, the terms and conditions, and, for an amendment, a redline showing what changed.
4. For rule changes that apply across contracts, such as fee schedules and rulebook amendments, use Rules & Rule Amendments on the same Industry Filings page.

Check the date. Terms are amended, so make sure the filing you are reading is the latest one for that contract.

The question and the source agency

Take the unemployment-rate contract that KalshiEX amended on 14 April 2025 (rulebook code U3). Its terms define the Underlying as the seasonally adjusted U-3 unemployment rate in the Bureau of Labor Statistics’ monthly Employment Situation Report, name the BLS as the Source Agency, and set the Payout Criterion as values “strictly greater than” the listed percentage. A reading exactly equal to the strike resolves No. That is the kind of detail the headline question can hide.

The terms also give instructions on where to find the figure in the report, but they say those instructions are for convenience only and are not part of the binding terms. Read the Underlying and Payout Criterion; they are what count.

Revisions matter for economic data. These terms say revisions to the Underlying made after expiration will not be taken into account. The CFTC’s Appendix C guidance for cash-settled contracts makes a related point: the last trading day should come before the settlement figure is published.

Timing, delays and what happens if the source fails

The U3 terms set the last trading time at 8:29 AM ET on the scheduled release day, and an expiration time of 10:00 AM ET. Settlement is due no later than the day after the Expiration Date unless the outcome is under review. The latest Expiration Date is three months after the scheduled release; if no data is available by then, the contract resolves on the last available month’s figure.

The redline shows why the date of the version matters: the earlier wording said that with no data the market would resolve No. The amendment changed it.

The exchange’s rulebook adds general fallbacks. In the version filed on 14 November 2024 (version 1.14; the rulebook has been amended and renumbered since, so check the current one), Kalshi could move an expiration date if data from a source was delayed, name a new source agency if the original became unavailable or unreliable, and, where an outcome could not be determined and the terms did not cover the case, pay out at the contract’s last traded price or let its Outcome Review Committee decide a fair allocation. The CFTC says customers are entitled to know how settlement determinations will be made, who decides, and how. These clauses are where that is written down.

Payout, tick size, position limits and collateral

The U3 terms set a Settlement Value of $1.00 and a Minimum Tick of $0.01. The filing adds that price bands keep prices between $0.01 and $0.99 and that trading is available at all times outside announced maintenance windows. Other contracts and exchanges set different ticks and hours: Kalshi’s October 2026 rebate filing refers to markets whose minimum tick, for prices between $0.10 and $0.90, is $0.005 or smaller.

Core Principle 5 requires an exchange to adopt position limits or position accountability for speculators, as necessary and appropriate. The U3 contract uses a Position Accountability Level of 7,000,000 contracts per member. Under the 2024 rulebook, a member above that level must give the exchange information about the position and may be told to stop adding to it or to reduce it. A position limit is a hard cap; an accountability level is a threshold for scrutiny.

The same rulebook said all member positions are fully cash collateralized: before a trade, the exchange checks that the account can cover the maximum loss and debits that amount, so a buyer’s maximum loss is the price paid plus fees. Futures traded on margin work differently (see how futures contracts work and what a margin call is). Kalshi has since filed a fee schedule for perpetual futures, extended in June 2026 to customers trading through futures commission merchants, so read the current rulebook and your account agreement rather than assuming every product works the same way.

Fees, the spread and the order book

Fees are set in the exchange’s fee schedule, which is filed with the CFTC when it changes. Kalshi’s October 2026 rebate filing works its general taker fee per contract as 0.07 × price × (1 − price), before rounding, for self-clearing members: $0.0175 on a contract at $0.50, the price at which it is highest. The rulebook also allows settlement fees, and the exchange runs rebate programs for its most active self-clearing members. Check the fee schedule in force on the day you trade.

The second cost is the bid-ask spread. The CFTC notes that in most cases order books show real-time customer bids and asks. Kalshi’s 2024 rulebook says members can see the best bid and offer and the order book up to the fifth price level, with orders matched by price and then time.

Example, with hypothetical numbers: a “yes” contract shows a best bid of 38 cents and a best offer of 42 cents. A trader buys 100 contracts at the offer for $42. Using the formula above, and assuming a taker fee on both fills, the fee is 0.07 × 0.42 × 0.58 = about 1.7 cents a contract, or about $1.71. If the trader sold straight away at the 38-cent bid, the sale would bring $38 less a fee of about $1.65 (0.07 × 0.38 × 0.62 × 100), so the round trip would cost about $7.35: $4 of spread and about $3.35 of fees. If instead the contracts are held and settle “yes”, they pay $100, a gain of about $56.29 after the purchase fee and before any settlement fee.

A checklist before you trade

• Underlying and source. Which exact figure or result, from which named source, and on what basis (for example seasonally adjusted).
• Payout Criterion. Above, at least, exactly or between; what happens at the boundary.
• Timing. Last trading time, expiration time, settlement date, time zone.
• Delays and revisions. What happens if the source is late, revises its figure or stops publishing.
• Discretion. Who decides disputed outcomes, and on what basis.
• Payout, tick, limits. Settlement value, minimum tick, position limit or accountability level.
• Collateral, fees, hours. How much is debited per contract, the fee formula and rounding, any settlement fee, and trading hours.
• Version. The filing date and any later amendments.

Contracts that settle on what one person says or does carry particular manipulation risks; see our brief on the CFTC staff advisory on mention markets.

Frequently asked questions

Where can I read the official terms of an event contract? On the exchange’s website, where Rule 40.2 requires it to post each submission, and in the filing on the CFTC’s Industry Filings pages under Products, Designated Contract Markets. Parts the exchange asks to keep confidential may be redacted.

Does self-certification mean the CFTC approved the contract? No. The exchange certifies that the contract complies with the law and CFTC rules; the CFTC can ask for more information and can stay a listing in some circumstances. An exchange can instead ask for prior approval.

What happens if the data source is late or revises its number? It depends on the terms. The unemployment-rate contract described here ignores revisions after expiration and, if no data arrives by its latest expiration date, resolves on the last available month’s figure. Other contracts can say something different.

Can I lose more than I paid for an event contract? On an exchange where positions are fully cash collateralized, as in Kalshi’s 2024 rulebook, the most a buyer can lose is the price paid plus fees. Check the rulebook for the product and account type you use.

Are the “how to find the number” instructions binding? Not in the filing used here: its terms say those instructions are for convenience only. The Underlying, Source Agency and Payout Criterion are what decide the result.