Resolution Criteria

Resolution criteria are the specific, pre-defined rules that determine how a prediction market contract settles. They specify the data source, measurement method, and exact conditions for a Yes or No outcome.

CLI:sf market KXCPI-26MAR-T3.5

Why Resolution Criteria Matter

Resolution criteria are the most important thing to read before entering a trade. Ambiguous or misunderstood resolution criteria are the #1 source of unexpected losses for new prediction market traders.

Anatomy of Resolution Criteria

Every well-designed contract specifies:

The data source: Which official source determines the outcome (e.g., "BLS CPI report")
The measurement: What exact number matters (e.g., "year-over-year CPI-U, seasonally adjusted")
The threshold: The cutoff value (e.g., "above 3.0%")
The timing: When the data must be published (e.g., "as reported on the initial release")
Edge cases: What happens if data is revised, delayed, or unavailable

Common Pitfalls

Revision risk: A GDP contract might resolve on the "advance estimate" (published 30 days after quarter end) vs. the "final revision" (published 90 days later). The numbers can differ by 1+ percentage points.
Definition differences: "Recession" could mean two consecutive quarters of negative GDP, or the official NBER declaration, or something else entirely.
Time zone ambiguity: "Will Bitcoin exceed $100K on January 1?" — in which time zone?

Reading Criteria in the CLI

When you pull up a market with sf market, the resolution rules are displayed alongside the price data. Always read them before placing a trade.

Example

Kalshi contract: KXCPI-26MAR-T3.5
"Will March 2026 CPI exceed 3.5%?"

Resolution criteria:
  Source: Bureau of Labor Statistics (BLS)
  Measure: CPI-U, all items, 12-month percent change
  Report: The initial release (not revised)
  Threshold: Strictly greater than 3.500%

Note: If BLS reports 3.500% exactly, the contract settles NO.
      Only values strictly above 3.500% trigger YES settlement.

Related Terms

Binary Contract

A binary contract is a financial instrument that pays out a fixed amount (typically $1) if a specified condition is met, and nothing otherwise. Prediction markets are built on binary contracts.

Settlement

Settlement is the process by which a prediction market contract is resolved to its final value — either $1.00 (Yes) or $0.00 (No) — once the outcome of the underlying event is determined.

Event Contract

An event contract is a type of binary contract tied to a specific real-world event with a defined resolution date. Unlike perpetual financial instruments, event contracts have a built-in expiration.

Contract Expiration

Expiration is the date and time by which a prediction market contract must resolve. If the event has not occurred by expiration, the contract settles to $0 for Yes holders and $1 for No holders.

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