KalshiEX LLC

KalshiEX LLC

July 21, 2023

SUBMITTED VIA CFTC PORTAL 

Secretary of the Commission 

Office of the Secretariat 

U.S. Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street, N.W. 

Washington, D.C. 20581 

Re: KalshiEX LLC – CFTC Regulation 40.2(a) Notification Regarding the Initial Listing 

of the "Will there be more than <count> measles cases in <year>?" Contract

Dear Sir or Madam, 

Pursuant to Section 5c(c) of the Commodity Exchange Act and Section 40.2(a) of the regulations of the 

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

is self-certifying the "Will there be more than <count> measles cases in <year>?" contract (Contract). The 

Exchange intends to list the contract on an annual basis. The Contract’s terms and conditions (Appendix 

A) includes the following strike conditions:

● <year> (the target year)

● <count> (the target number of measles cases)

Along with this letter, Kalshi submits the following documents:

● A concise explanation and analysis of the Contract;

● Certification;

● Appendix A with the Contract’s Terms and Conditions; 

● Confidential Appendices with further information; and

● A request for FOIA confidential treatment.

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

Sincerely, 

Xavier Sottile

Head of Markets 

KalshiEX LLC 

xsottile@kalshi.com
KalshiEX LLC

KalshiEX LLC

KalshiEX LLC

Official Product Name: "Will there be more than <count> measles cases in <year>?"

Rulebook: MEASLES

Kalshi Contract Category: Health/Science

Measles cases

July 21, 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 there be more than <count> measles cases in <year>?" Contract is a contract 

relating to the number of measles cases reported in the United States by the Center for 

Disease Control in a given year. After careful analysis, Kalshi (hereafter referred to as 

“Exchange”) has determined that the Contract complies with its vetting framework.

Measles is a highly contagious and dangerous viral infection. Despite widespread 

immunization, there has been growth in measles cases in the 2010s and 2020s.

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.

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 event 

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 
KalshiEX LLC

KalshiEX LLC

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. 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 there are above <count> measles cases in <year>, 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 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: July 21, 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

Official Product Name: Will there be more than <count> measles cases in <year>?

Rulebook: MEASLES
KalshiEX LLC

KalshiEX LLC

MEASLES

Scope: These rules shall apply to this contract.

Underlying: The Underlying for this Contract is the number of measles cases in the United States 

in a given year according to the website of the Centers for Disease Control (“CDC”). Revisions to 

the Underlying made after Expiration will not be accounted for in determining the Expiration 

Value.

Instructions: The Underlying can be found here. These instructions on how to access the 

Underlying 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. 

Source Agency: The Source Agency is the CDC.

Type: The type of Contract is an Event Contract.

Issuance: The Contract will be issued on an annual basis.

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

range between 0 and 1,000,000 at consecutive increments of <1>. Due to the potential for 

variability in the Underlying, the Exchange may modify <count> levels in response to suggestions 

by Members.

<year>: <year> refers to a calendar year specified by Kalshi. Kalshi may list iterations of the 

Contract corresponding to variations of <year>.

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

there are above <count> measles cases in <year>. 

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 of the Contract will be the sooner of the date of the 

first 10:00 AM ET following the occurrence of an event that is encompassed in the Payout 

Criterion or the last day of <year>. The Last Trading Time will be 11:59 PM ET.

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.
KalshiEX LLC

KalshiEX LLC

Expiration Date: The Expiration Date of the Contract shall be the sooner of the date of the first 

10:00 AM ET following the occurrence of an event that is encompassed in the Payout Criterion, 

the date of the first 10:00 AM ET following the release of the data for all of <year>, or one year 

after <year>.

Expiration time: The Expiration time of the Contract shall be 10:00 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 

Source Agency 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, as well as any other action 

authorized in the Rulebook.