The boom, in numbers
Pew's analysis uses data from The Block. Here is what it reports.
| Measure | Figure |
|---|---|
| Kalshi + Polymarket monthly volume, Sept 2025 | Under $5 billion |
| Kalshi + Polymarket monthly volume, April 2026 | About $24 billion |
| Polymarket International, April 2026 | $9 billion |
| Polymarket US, April 2026 | $1.3 billion |
| US legal sportsbook handle, 2025 monthly average | About $14 billion |
Source: >Pew Research Center
The topic mix matters more than the headline. From July 2024 to April 2026, sports made up 80% of Kalshi's volume. Crypto was 7% and politics 4%. On Polymarket International, sports was 39%, politics 32% and crypto 20%. Across both, sports, politics and crypto account for 90–91% of volume (>Pew).
So most of this money rides on games. Very little of it is tied to your stocks.
How an event contract works
Kalshi explains it plainly. A "Yes" buyer and a "No" buyer together put up $1. If Yes trades at 70 cents, No trades at 30 cents. The price reads as the crowd's probability, from 0% to 100%. Kalshi does not set the price. It matches you with a trader on the other side (>Kalshi Help Center).
The math before fees:
- Buy Yes at $0.70. If Yes settles, you collect $1.00 and make $0.30.
- If No settles, you lose the $0.70.
- Your risk is $0.70 to make $0.30. You need to be right more than 70% of the time just to break even.
That last line is the whole game. The price already bakes in the crowd's odds. You only profit if your odds are better.
How an option differs
A stock option also has a defined premium. The payoff shape is where they part ways.
| Event contract (Kalshi-style) | Listed stock or index option | |
|---|---|---|
| Payoff | Fixed: $1 or $0 per contract | Grows with how far price moves past the strike |
| What drives value | Crowd probability of one outcome | Underlying price, time left, implied volatility |
| Question it answers | "Will X happen?" | "How far, how fast, by when?" |
| Can you hedge a stock position? | Only loosely, through a related event | Directly, on the same underlying |
| Where hedging flow shows up | Not in the stock market | In dealer positioning (gamma) |
That last row is the bridge for stock traders. When you buy or sell options, market makers on the other side hedge in the underlying. That hedging can pin price or push it. Event contracts on a ball game create no such flow in SPY.
Where Cboe fits: Cboe Predicts
Cboe moved to join the two worlds. On June 23, 2026, it launched Cboe Predicts with binary option contracts on the Mini-S&P 500 Index (XSP), symbols XSPBW and XSPBX. XSP is 1/10 the size of SPX. A "yes" position pays $100 if the index settles at or above a set level, and $0 otherwise. A "no" position pays $100 if it settles below (>Cboe).
The key difference from Kalshi and Polymarket: these are listed on Cboe Exchange as securities options and cleared through the Options Clearing Corporation. Interactive Brokers offered them at launch, with Charles Schwab expected to follow (>Cboe).
Cboe's JJ Kinahan tied the move to short-dated options: "Following the success of SPX 0DTE options, we have seen continued customer demand for shorter-dated, outcome-based trading" (>Cboe). Markets Media reports a "payout zone" feature with three outcomes ($0, partial or $100) built on vertical spread mechanics. It also reports that 0DTE SPX vertical spreads averaged nearly 580,000 contracts a day in 2025 (>Markets Media).
The 0DTE demand is real. In June 2026, SPX 0DTE options set a monthly ADV record of 3.3 million contracts (>Cboe).
The regulatory picture is still moving
Kalshi is regulated by the CFTC. Polymarket US became CFTC-regulated in December 2025. Polymarket International is unregulated (>Pew).
States are pushing back. On September 24, 2026, New York Attorney General Letitia James filed a petition to stop the operator of Polymarket US from offering contracts in New York without state gaming licenses. New York had already acted against Coinbase and Gemini in April 2026 and Kalshi in July 2026 (>Finance Magnates). No court had ruled when that report was published.
If you trade these contracts, access can change by state. Listed options do not carry that same state-gaming question.
What this means for a stock trader
- Read odds as context. A contract on a Fed decision tells you what the crowd expects. It does not tell you how SPY will react.
- Match the tool to the question. "Will it happen?" fits a binary. "How far will it move?" fits an option.
- Respect the break-even. At a 70-cent price you need better than 70% accuracy. That's a high bar for any trader.
- Watch the hedging flow. Options positioning changes how the underlying trades. Event contracts on sports do not.
How to use it on the Loomi.Ai Desk
Loomi.Ai does not offer prediction market trading. The Desk focuses on the options side, where dealer hedging leaves footprints in the stock.
- Options Flow with OI, Greeks and GEX/DEX. Listed on the Desk plan, alongside "Momentum & Volume Scanners and Dealer Walls."
- GEX Regime page. It shows net dealer gamma per name in dollars and pins SPY, QQQ, IWM and GLD first. At positive gamma of +$2bn or more, the page reads: "Dealers dampen moves. The range holds and the walls act as a fence." At −$1bn or less: "Dealers amplify moves. Walls stop holding."
- Dealer gamma primer. The GEX explainer covers call walls, put walls and the zero-gamma line.
One honest note: Loomi's 0DTE credit-spread ladder on the GEX page is in build and not live yet. The regime read and wall warnings are what you can use today. The Desk is $8/mo intro, then $20/mo.
Put the research to work on your Desk
Explore the tools behind the research, compare the available access, or open your Desk if you already have an account.
FAQ
Are prediction markets the same as options? No. An event contract pays a fixed $1 or $0 on one outcome. An option's value changes with the underlying's price, time and volatility. Cboe's XSP binaries sit in between: a fixed $100 or $0 payout, listed and cleared like options.
Is Kalshi legal in the US? Kalshi is regulated by the CFTC, per Pew. Some states, including New York, have challenged prediction market operators under state gambling law. Check your state before you trade.
What is Cboe Predicts? Cboe's prediction markets suite, launched June 23, 2026. Its first products are binary options on the Mini-S&P 500 Index that pay $100 or $0 at settlement.
Can prediction market odds help me trade stocks? They can tell you what the crowd expects from an event. They don't show how dealers are positioned in a stock. For that, options data such as gamma exposure is the closer read.
Loomi.Ai provides educational market research, not financial advice. Trading options, futures and event contracts involves substantial risk of loss.
Sources
- >Trading volume on prediction markets has soared in recent months, Pew Research Center
- >How are prices determined?, Kalshi Help Center
- >Cboe Introduces Cboe Predicts, Launching First Products in New Prediction Markets Suite, Cboe Global Markets
- >Market Metrics That Matter: Derivatives June 2026 Volume Highlights, Cboe
- >Cboe Aims to Convert Prediction Market Traders to Options, Markets Media
- >After Coinbase, Gemini and Kalshi, New York Takes Its Prediction Market Fight to Polymarket, Finance Magnates