KalshiEX LLC

KalshiEX LLC

April 26, 2023

SUBMITTED VIA CFTC PORTAL 

Secretary of the Commission 

Office of the Secretariat 

U.S. Commodity Futures Trading Commission 

Three Lafayette Center 

1155 21st Street, N.W. 

Washington, D.C. 20581 

Re: KalshiEX LLC – CFTC Regulation 40.6 Notification Regarding the Amendment of 

the “What will the average number of passengers screened by the TSA be this week?” 

Contract

Dear Sir or Madam, 

Pursuant to Section 5c(c) of the Commodity Exchange Act and Section 40.6 of the regulations of the 

Commodity Futures Trading Commission, KalshiEX LLC (Kalshi) hereby notifies the Commission that 

it is amending the “What will the average number of passengers screened by the TSA be this week?” 

contract (Contract). 

This filing is a straightforward modification of Kalshi’s previous “What will the average number of 

passengers screened by the TSA be this week?” contract. The changes are as follows:

● The contract’s Expiration time was changed from 10:00 AM ET to 9:00 AM ET.

Along with this letter, Kalshi submits the following documents:

● A clean copy of the amended Contract; and 

● A redline showing the changes to Appendix A, the product rules and terms and conditions of the 

contract.

If you have any questions, please do not hesitate to contact me. 

Sincerely, 

Elie Mishory

Chief Regulatory Officer 

KalshiEX LLC 

emishory@kalshi.com
KalshiEX LLC

KalshiEX LLC

KalshiEX LLC

Official Product Name: What will the average number of passengers screened by the TSA be this week?

Ticker: TSAW

Kalshi Contract Category: Transportation

Weekly TSA

April 26, 2023

CONCISE EXPLANATION AND ANALYSIS OF THE PRODUCT AND ITS 

COMPLIANCE WITH APPLICABLE PROVISIONS OF THE ACT, INCLUDING 

CORE PRINCIPLES AND THE COMMISSION'S REGULATIONS THEREUNDER

Pursuant to Commission Rule 40.2(a)(3)(v), the following is a concise explanation and analysis 

of the product and its compliance with the Act, including the relevant Core Principles, and the 

Commission's regulations thereunder.

I. Introduction

The “Will weekly average TSA airport screenings be above <count>?” contract is a 

contract relating to the number of security checkpoint screenings for individual customers 

conducted by the Transportation Security Administration (“TSA”) at US airports. The 

Contract is designed to enable market participants whose businesses or operations are 

affected by changes in the volume of American passenger air travel to mitigate the 

commercial risks associated with decreases in the volume of American passenger air 

travel. After careful analysis, Kalshi (hereafter referred to as “Exchange”) has determined 

that the Contract complies with its vetting framework, which has been reviewed by the 

CFTC and formed part of the Exchange’s application for designation as a Contract 

Market (“DCM”) that was approved by the Commission. 

The number of TSA airport screenings is widely used as a proxy for the overall amount 

of passenger air travel in the United States, which in turn is a core indicator for the health 

of the US economy. Passenger air travel is used to fuel tourism and commerce across the 

country, and the US aviation industry drives over $1.7 trillion in economic activity and 

employs over 10 million workers.1

Further information about the Contract, including an analysis of its risk mitigation and 

price basing utility, as well as additional considerations related to the Contract, is 

included in Confidential Appendices B, C, and D.

1 https://www.airlines.org/industry/
KalshiEX LLC

KalshiEX LLC

Pursuant to Section 5c(c) of the Act and CFTC Regulations 40.2(a), the Exchange hereby 

certifies that the listing of the Contract complies with the Act and Commission 

regulations under the Act.

General Contract Terms and Conditions: The Contract operates similar to other binary 

contracts that the Exchange lists for trading. The minimum price fluctuation is $0.01 (one 

cent). Price bands will apply so that Contracts may only be listed at values of at least 

$0.01 and at most $0.99. Further, the Contract is sized with a one-dollar notional value 

and has a minimum price fluctuation of $0.01 to enable Members to match the size of the 

contracts purchased to their economic risks. The Exchange has further imposed position 

limits (defined as maximum loss exposure) of $25,000 USD on the Contract. As outlined 

in Rule 5.12 of the Rulebook, trading shall be available at all times outside of any 

maintenance windows, which will be announced in advance by the Exchange. Members 

will be charged fees in accordance with Rule 3.6 of the Rulebook. Fees are charged in 

such amounts as may be revised from time to time to be reflected on the Exchange’s 

Website. Additionally, as outlined in Rule 7.2 of the Rulebook, if any event or any 

circumstance which may have a material impact on the reliability or transparency of a 

Contract’s Source Agency or the Underlying related to the Contract arises, Kalshi retains 

the authority to designate a new Source Agency and Underlying for that Contract and to 

change any associated Contract specifications after the first day of trading. That new 

Source Agency and Underlying would be objective and verifiable. Kalshi would 

announce any such decision on its website. All instructions on how to access the 

Underlying are non-binding and are provided for convenience only and are not part of the 

binding Terms and Conditions of the Contract. They may be clarified at any time. 

Furthermore, the Contract’s payout structure is characterized by the payment of an 

absolute amount to the holder of one side of the option and no payment to the 

counterparty. During the time that trading on the Contract is open, Members are able to 

adjust their positions and trade freely. After trading on the Contract has closed, the 

Expiration Value and Market Outcome are determined. The market is then settled by the 

Exchange, and the long position holders and short position holders are paid according to 

the Market Outcome. In this case, “long position holders” refers to Members who 

purchased the “Yes” side of the Contract and “short position holders” refers to Members 

who purchased the “No” side of the Contract. If the Market Outcome is “Yes,” meaning 

that the average number of passengers screened by the TSA for the week ending <date> 

is strictly greater than <count>, then the long position holders are paid an absolute 

amount proportional to the size of their position and the short position holders receive no 

payment. If the Market Outcome is “No,” then the short position holders are paid an 

absolute amount proportional to the size of their position and the long position holders 

receive no payment. Specification of the circumstances that would trigger a Market 
KalshiEX LLC

KalshiEX LLC

Outcome of “Yes” are included below in the section titled “Payout Criterion” in 

Appendix A. 
KalshiEX LLC

KalshiEX LLC

CERTIFICATIONS PURSUANT TO SECTION 5c OF THE COMMODITY 

EXCHANGE ACT, 7 U.S.C. § 7A-2 AND COMMODITY FUTURES TRADING 

COMMISSION RULE 40.2, 17 C.F.R. § 40.2

Based on the above analysis, the Exchange certifies that:

❏ The Contract complies with the Act and Commission regulations thereunder.

❏ This submission (other than those appendices for which confidential treatment has been 

requested) has been concurrently posted on the Exchange’s website at 

https://kalshi.com/regulatory/filings. 

Should you have any questions concerning the above, please contact the exchange at 

ProductFilings@kalshi.com. 

______________________

By: Eliezer Mishory

Title: Chief Regulatory Officer 

Date: April 26, 2023
KalshiEX LLC

KalshiEX LLC

Attachments:

Appendix A - Contract Terms and Conditions

Appendix B (Confidential) - Further Considerations

Appendix C (Confidential) - Source Agency

Appendix D (Confidential) - Compliance with Core Principles
KalshiEX LLC

KalshiEX LLC

APPENDIX A – CONTRACT TERMS AND CONDITIONS

TERMS OF CONTRACTS TRADED ON KALSHI

Official Product Name: What will the average number of passengers screened by TSA be 

this week?

Ticker and Rulebook: TSAW
KalshiEX LLC

KalshiEX LLC

TSAW

Scope: These rules shall apply to the TSAW contract .

Underlying: The Underlying for this Contract is the Transportation Security Administration’s 

(“TSA”) checkpoint travel numbers data for the week ending <date>, as reported by the TSA. 

Specifically, the checkpoint travel numbers published by the TSA will be used to compute a 

“Weekly Average” of traveler throughput. For the purposes of determining the Expiration Value 

of the Contract, “Weekly Average” is defined as the sum of the published TSA checkpoint travel 

numbers that are included in the 7-day period defined by Monday through Sunday, divided by 

the number of days in the week for which data was published. The “Weekly Average” is the 

value that will be used to determine the Expiration Value of the Contract each week. If the 

calculated Weekly Average is not a whole number and is instead a decimal, then the final value 

of Weekly Average will be calculated by rounding to the nearest integer. For example, a nonwhole number value of Weekly Average such as 1500000.32 would become 1500000 and a 

value such as 1500000.67 would become 1500001. The TSA may make adjustments to data after 

it has been initially published. If there is a revision of daily screening data for a certain day 

included in the statistical period published prior to the Expiration Date before the Expiration 

time, then this revised data will be accounted for in computing the Weekly Average. In all other 

cases, such as if revisions to data are published after the Expiration Date and Expiration time, 

revised data will not be used to compute the Weekly Average used to calculate Expiration Value.

Kalshi will rely only on data made available before Expiration Date to compute the Weekly 

Average. For example, if only five out of seven days of data are available by the Expiration Date, 

Kalshi will average across those five days to compute Weekly Average. As noted above, any 

revisions or data published after the Expiration Time on the Expiration Date will not be used to 

compute the Weekly Average.

Instructions: This data is collected daily by the TSA, and data for a certain day is published by 

9am ET the following day at the following website: https://www.tsa.gov/coronavirus/passengerthroughput. These instructions are provided for convenience only and may be modified or 

clarified at any time.

Source Agency: The Source Agency is the Transportation Security Administration (“TSA”).

Type: The type of Contract is an Event Contract.

Issuance: The Contract is based on the outcome of a recurrent data release which is issued on a 

daily basis (the TSA Checkpoint Travel Numbers report), and computed into a Weekly Average 

by the Exchange. Thus, Contracts will be issued on a weekly basis, and subsequent contracts will 

correspond to the next week. 
KalshiEX LLC

KalshiEX LLC

Count: Kalshi may list iterations of the contract with <count> levels that fall within an inclusive 

range between a maximum value of 10,000,000 and a minimum value of 0 at consecutive 

increments of 1,000. Due to the potential for variability in the Underlying, the Exchange may 

modify <count> levels in response to suggestions by Members.

Date: <date> refers to a date specified by Kalshi. Kalshi may list TSAW contracts corresponding 

to different statistical periods of <date>.

Payout Criterion: The Payout Criterion for the Contract encompasses the Expiration Values 

that are strictly above <count>.

Minimum Tick: The Minimum Tick size for the referred Contract shall be $0.01.

Position Limit: The Position Limit for the $1 referred Contract shall be $25,000 per Member.

Last Trading Date: The Last Trading Date for the Contract will be <date>. The Last Trading 

Time shall be 11:59 PM. 

Settlement Date: The Settlement Date of the Contract shall be no later than the day after the 

Expiration Date unless the Market Outcome is under review pursuant to Rule 7.1.

Expiration Date: The Expiration Date of the Contract shall be the sooner of the first 9:00 AM 

ET following the release of the data for <date>, or one week after <date>.

Expiration time: The Expiration time of the Contract shall be 9:00 AM ET.

Settlement Value: The Settlement Value for this Contract is $1.00.

Expiration Value: The Expiration Value is the value of the Underlying as documented by the 

Exchange on the Expiration Date at the Expiration time.

Contingencies: Before Settlement, Kalshi may, at its sole discretion, initiate the Market 

Outcome Review Process pursuant to Rule 6.3(c) of the Rulebook. Additionally, as outlined in 

Rule 7.2 of the Rulebook, if any event or any circumstance which may have a material impact on 

the reliability or transparency of a Contract’s Source Agency or the Underlying related to the 

Contract arises, Kalshi retains the authority to designate a new Source Agency and Underlying 

for that Contract and to change any associated Contract specifications after the first day of 

trading.
KalshiEX LLC

TSAW

Scope: These rules shall apply to the TSAW contract .

Underlying: The Underlying for this Contract is the Transportation Security Administration’s

(“TSA”) checkpoint travel numbers data for the week ending <date>, as reported by the TSA.

Specifically, the checkpoint travel numbers published by the TSA will be used to compute a

“Weekly Average” of traveler throughput. For the purposes of determining the Expiration Value

of the Contract, “Weekly Average” is defined as the sum of the published TSA checkpoint travel

numbers that are included in the 7-day period defined by Monday through Sunday, divided by

the number of days in the week for which data was published. The “Weekly Average” is the

value that will be used to determine the Expiration Value of the Contract each week. If the

calculated Weekly Average is not a whole number and is instead a decimal, then the final value

of Weekly Average will be calculated by rounding to the nearest integer. For example, a

non-whole number value of Weekly Average such as 1500000.32 would become 1500000 and a

value such as 1500000.67 would become 1500001. The TSA may make adjustments to data after

it has been initially published. If there is a revision of daily screening data for a certain day

included in the statistical period published prior to the Expiration Date before the Expiration

time, then this revised data will be accounted for in computing the Weekly Average. In all other

cases, such as if revisions to data are published after the Expiration Date and Expiration time,

revised data will not be used to compute the Weekly Average used to calculate Expiration Value.

Kalshi will rely only on data made available before Expiration Date to compute the Weekly

Average. For example, if only five out of seven days of data are available by the Expiration Date,

Kalshi will average across those five days to compute Weekly Average. As noted above, any

revisions or data published after the Expiration Time on the Expiration Date will not be used to

compute the Weekly Average.

Instructions: This data is collected daily by the TSA, and data for a certain day is published by

9am ET the following day at the following website:

https://www.tsa.gov/coronavirus/passenger-throughput. These instructions are provided for

convenience only and may be modified or clarified at any time.

Source Agency: The Source Agency is the Transportation Security Administration (“TSA”).

Type: The type of Contract is an Event Contract.

Issuance: The Contract is based on the outcome of a recurrent data release which is issued on a

daily basis (the TSA Checkpoint Travel Numbers report), and computed into a Weekly Average

by the Exchange. Thus, Contracts will be issued on a weekly basis, and subsequent contracts will

correspond to the next week.
KalshiEX LLC

Count: Kalshi may list iterations of the contract with <count> levels that fall within an inclusive

range between a maximum value of 10,000,000 and a minimum value of 0 at consecutive

increments of 1,000. Due to the potential for variability in the Underlying, the Exchange may

modify <count> levels in response to suggestions by Members.

Date: <date> refers to a date specified by Kalshi. Kalshi may list TSAW contracts corresponding

to different statistical periods of <date>.

Payout Criterion: The Payout Criterion for the Contract encompasses the Expiration Values that

are strictly above <count>.

Minimum Tick: The Minimum Tick size for the referred Contract shall be $0.01.

Position Limit: The Position Limit for the $1 referred Contract shall be $25,000 per Member.

Last Trading Date: The Last Trading Date for the Contract will be <date>. The Last Trading

Time shall be 11:59 PM.

Settlement Date: The Settlement Date of the Contract shall be no later than the day after the

Expiration Date unless the Market Outcome is under review pursuant to Rule 7.1.

Expiration Date: The Expiration Date of the Contract shall be the sooner of the first 109:00 AM

ET following the release of the data for <date>, or one week after <date>.

Expiration time: The Expiration time of the Contract shall be 109:00 AM ET.

Settlement Value: The Settlement Value for this Contract is $1.00.

Expiration Value: The Expiration Value is the value of the Underlying as documented by the

Exchange on the Expiration Date at the Expiration time.

Contingencies: Before Settlement, Kalshi may, at its sole discretion, initiate the Market

Outcome Review Process pursuant to Rule 6.3(c) of the Rulebook. Additionally, as outlined in

Rule 7.2 of the Rulebook, if any event or any circumstance which may have a material impact on

the reliability or transparency of a Contract’s Source Agency or the Underlying related to the

Contract arises, Kalshi retains the authority to designate a new Source Agency and Underlying

for that Contract and to change any associated Contract specifications after the first day of

trading.