Spreads, liquidity and limit orders

Most beginners on Polymarket or Kalshi focus on one question: will this happen? Just as important is how you trade it. The spread, the depth of the order book and the type of order you use decide how much of your money goes to the market instead of to you. This guide explains those mechanics with simple worked examples. It’s education, not tips: nothing here tells you what to buy.

1. Read the order book before you trade

Every market has two prices, not one: the best bid (what buyers will pay) and the best ask (what sellers want). The price shown on a market’s card is usually the last trade or the midpoint between them.

If you buy at the ask and immediately sell at the bid, you lose the spread. On the busy market that’s 1¢ a share; on the quiet one it’s 8¢, more than any trading fee. A wide spread doesn’t make a market bad, but it means your view has to be right by more to come out ahead.

2. Check the depth, not just the top price

Liquidity is how much you can trade near the current price. Suppose the asks look like this:

A market order for 1,000 shares fills 200 at 30¢, 300 at 32¢ and 500 at 36¢: an average of 33.6¢, not the 30¢ you saw. That gap is slippage. Platforms show the average price before you confirm; read it. On thin markets, split big orders or use limit orders.

3. Use limit orders

• Market order: fills now at whatever the book offers. Fast, but you pay the spread, any slippage and usually the taker fee.
• Limit order: fills only at your price or better. You might wait or never fill, but you control the price. On both Polymarket and Kalshi, an order that rests on the book and fills later is a maker order, which on most markets pays no fee.

Example: a market shows 44¢ bid and 47¢ ask. Instead of buying at 47¢, you place a limit buy at 45¢. If a seller comes down to you, you save 2¢ a share plus the taker fee. If nobody does, you haven’t lost anything except the opportunity.

4. Know what fees cost at your price

Both big venues charge takers a fee shaped like price × (1 − price), which peaks at 50¢. On 100 shares at 50¢ that’s about $1 to $1.75 depending on the venue and category; at 90¢ it’s well under half that. Small trades in the middle of the range pay proportionally the most. Details: Polymarket fees and Kalshi fees.

5. Think in expected value, not in “likely”

A share is worth buying only if your honest estimate of the chance is above its price by more than your costs. If you think something is 70% likely and it trades at 75¢, it’s “likely” but overpriced by your own estimate. If you can’t say why the market is wrong, the price is probably your best estimate too.

Convert prices to other odds formats with our odds converter.

6. Read the rules before the title

Markets settle on their written rules and named source, not on the headline. “Will X happen by December 31?” and “Will X happen in 2026?” can resolve differently. The same question on two venues can also have different rules, which is why a price gap isn’t automatically free money. Our price-gap scanner only tracks pairs we’ve checked ask the same question.

7. Size small and plan your exit

• Even a well-priced 70% outcome loses three times in ten. Keep each position small enough that losing it doesn’t matter.
• You can sell before settlement, but only at what buyers will pay at that moment. On thin markets that can be far below the last price.
• Money in a long-dated market is tied up until it settles. A market that ends in 2028 locks your stake for years.

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Related: Weekly Polymarket vs Kalshi gaps · Prediction market glossary · What are prediction markets? · How Kalshi makes money · How Polymarket makes money