KalshiEX LLC

September 6, 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 the highest temperature in the United States be <above/below/between>

<count>?” 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 the highest temperature in the United States be <above/below/between>

<count>?” contract (Contract). The contract will be initially listed after close-of-business on September

7, 2023; it is listed as September 8, 2023 because of limitations of the Commission's online submission

portal.The Exchange intends to list the contract on a daily basis. The Contract’s terms and conditions

(Appendix A) includes the following strike conditions:

● <date> (the target date)

● <count> (the target temperature)

● <above/below/between>

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 the highest temperature in the United States be <above/below/between>

<count>?

Rulebook: USHIGH

Kalshi Contract Category: Weather/Climate

U.S. daily high temperature

September 6, 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 the highest temperature in the United States be <above/below/between> 

<count>?” Contract is a contract relating to the temperature in the United States. After 

careful analysis, Kalshi (hereafter referred to as “Exchange”) has determined that the 

Contract complies with its vetting framework. 

The United States, and the globe, is increasingly hot. This year is expected to be the 

hottest year on record, with numerous heat records broken. 1 The Intergovernmental Panel 

on Climate Change (“IPCC”), a consortium of over 1,300 scientists from around the 

world, has projected a temperature increase of anywhere from 2.5 to 10°F during the 21st 

century. The magnitude of the increase, however, will determine the future effects of 

climate change—including whether sea levels will rise by one foot or eight feet, how 

often the South is hit by extreme heat waves, how bad droughts are in the Southwest, and 

how severe wildfires are in California. This Contract provides researchers and 

policymakers a valuable datapoint on the market’s view towards the level of global 

heating. The Contract also .allows individuals and corporations to hedge the economic 

risks associated with the pace of global warming, including the risk of flooding, wildfires, 

and extreme weather. 

1 https://www.washingtonpost.com/weather/2023/07/21/us-heat-wave-heat-dome-climate/

KalshiEX LLC 
KalshiEX LLC

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 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. A new Source Agency can be added via a Part 40 amendment. 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 U.S. high temperature on <date> is <above/below/between> <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 Outcome of “Yes” are included below in the 

section titled “Payout Criterion” in Appendix A. 

KalshiEX LLC 
KalshiEX LLC

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: Xavier Sottile 

Title: Head of Markets 

Date: September 6, 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 the highest temperature in the United States be 

<above/below/between> <count>? 

Rulebook: USHIGH 

KalshiEX LLC 
KalshiEX LLC

USHIGH

Scope: These rules shall apply to this contract. 

Underlying: The Underlying for this Contract is the national high temperature on <date> 

according to the National Weather Service. Revisions to the Underlying made after Expiration 

will not be accounted for in determining the Expiration Value. 

Instructions: The Underlying is available 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 National Weather Service. 

Type: The type of Contract is an Event Contract. 

Issuance: The contract will be issued daily. 

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

inclusive range between 0 and 200 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. 

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

Contract corresponding to different statistical periods of <date>. 

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

are <above/below/between> <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 of the Contract will be <date>. 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 

8:00 or 9:00 AM ET following the release of data for <date>, or one week after <date>. 

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. 

KalshiEX LLC