The fee structure
fee ≈ 7% × contracts × P × (1 − P), rounded up to the cent per order
P is the price as a probability. The P × (1 − P) part is largest at 50¢ and shrinks toward 0¢ and 100¢. This is a common structure among event-contract exchanges; rates and rounding vary, so check your exchange's schedule.
Fee as a share of the price
| Price | Est. fee per contract | Share of price |
|---|---|---|
| 5¢ | 0.33¢ | 6.7% |
| 10¢ | 0.63¢ | 6.3% |
| 25¢ | 1.31¢ | 5.3% |
| 50¢ | 1.75¢ | 3.5% |
| 75¢ | 1.31¢ | 1.8% |
| 90¢ | 0.63¢ | 0.7% |
Per-contract fees before rounding. On a real order, the total is rounded up to the cent.
The fee in cents is the same at 25¢ and 75¢, but it is about three times the share of the price on the cheaper side. Combos and long prices sit at the expensive end.
Small orders pay more per contract
Because the fee rounds up per order, a tiny order can pay much more than the formula suggests.
| Order | Fee | Per contract | Share of price |
|---|---|---|---|
| 1 contract at 10¢ | $0.01 | 1.00¢ | 10.0% |
| 10 contracts at 10¢ | $0.07 | 0.70¢ | 7.0% |
| 100 contracts at 10¢ | $0.63 | 0.63¢ | 6.3% |
| 1 contract at 50¢ | $0.02 | 2.00¢ | 4.0% |
| 100 contracts at 50¢ | $1.75 | 1.75¢ | 3.5% |
What this means in practice
- On cheap contracts, fees are a real cost. At 10¢, a 6–10% fee has to be overcome before any edge counts.
- Hedges often sit on the cheap side. If you hold a favorite, your hedge is the underdog, where fees take the biggest share.
- Many small orders cost more than one larger one. Rounding up adds a little to each.
