Payout versus profit, fees, and spreads

New readers often say a contract "paid 100." It did, but the trader did not make 100. Four numbers separate the payout from the profit: the price paid, the spread crossed to get in, any fee, and the part of the order that never filled.

Payout, profit, and the price you paid

A YES contract bought at 62 that settles YES pays 100. The profit is 38, not 100. The percentage return is 38 divided by 62, about 61%. The same contract bought at 80 pays the same 100 and returns 25%. The payout is fixed; the profit depends entirely on the entry price. This is why the entry price matters on every trade and why "the favorite won" says nothing about whether the trade was good.

The spread

Every market has a best bid (what buyers will pay) and a best ask (what sellers want). If YES shows 44 bid and 46 ask, the displayed "price" may be 45, but you buy at 46 and, if you change your mind a minute later, sell at 44. Those two points are the cost of entering and leaving immediately. On a tight, liquid market that cost is a point or two. On a thin market it can be ten or more, and it is the first thing to check before believing a headline price.

Fees

Venues charge fees, and the schedules differ and change. As of September 2026, Kalshi charges a trading fee that scales with the contract price, so it is largest on contracts near 50 and smallest near the extremes. Polymarket has historically charged no fee on most markets and has fees on some. Do not rely on our description: read the venue's current fee schedule before trading. What matters here is the shape of the effect: fees are a fixed drag that turns a thin edge into no edge, especially on contracts near 50, and they make round trips on near-certain contracts unprofitable.

Worked example

You believe the Fed will hold. The hold contract shows 44 bid, 46 ask.

Step	Amount
Buy 100 YES at the ask	pay 4,600
Fee (illustrative, check the venue)	pay 70
Contract settles YES	receive 10,000
Profit	5,330
Return on money risked	114%

Now the same trade at a contract showing 80 bid, 82 ask:

Step	Amount
Buy 100 YES at 82	pay 8,200
Fee (illustrative)	pay 50
Settles YES	receive 10,000
Profit	1,750
Return	21%

Same event, same payout, very different trade.

Limit orders and partial fills

A market order takes whatever is on the other side at whatever price, and on a thin book it can walk the price against you. A limit order names your price and waits. The cost is that it may fill only partly, or not at all, if the market moves away. A stated entry price works this way: "worth it below 55" is a limit, and if the market never gets there, there was no trade.

What to take away

• Profit is payout minus price; return depends on the entry.
• The spread is a real cost paid twice on a round trip.
• Fees change and differ by venue; read the schedule, and expect them to bite hardest near 50.
• A limit order is how a stated price becomes a real entry, and a partial fill is the price of that discipline.