Kalshi Fed Futures Arb Trader#

This is a template.

The default signal uses static CME FedWatch probabilities -- remix it with live FedWatch scraping, OIS curve extraction, or SOFR futures-implied paths.

The skill handles all the plumbing (market discovery, trade execution, safeguards). Your agent provides the alpha.

Strategy Overview#

CME FedWatch Tool derives rate-cut probabilities from fed funds futures -- a deep, institutional market. Kalshi lists the same events as prediction markets. This skill compares the two and trades when Kalshi diverges from the futures-implied fair value.

Key advantages:

• Futures are the institutional benchmark -- deep liquidity and professional pricing
• Kalshi retail flow creates mispricing -- especially around FOMC meetings
• Multiple meetings -- signals across the entire rate path

Signal Logic#

FedWatch Arbitrage Model#

1. Load CME FedWatch implied probabilities per FOMC meeting
2. Fetch Kalshi Fed rate decision markets
3. Match markets to meetings and detect direction (cut vs hike)
4. Compute edge: fair_yes - market_price
5. Trade when |edge| >= entry_edge

Example (with defaults)#

MeetingFedWatch P(cut)Kalshi PEdgeActionJun 202635%25%+10%BUY YESSep 202668%70%-2%HoldDec 202682%65%+17%BUY YES

Remix Ideas#

• Live FedWatch scraper: Auto-refresh from CME website
• OIS curve extraction: Derive probabilities from overnight index swaps
• SOFR futures: Use SOFR futures strips for higher precision
• Cross-meeting consistency: Enforce temporal monotonicity across meetings

Risk Parameters#

ParameterDefaultNotesEntry edge8%Min FedWatch-vs-Kalshi divergence to tradeExit threshold45%Sell when position price reaches thisMax position size$5.00 USDCPer marketMax trades per run3Rate limitingMax slippage15%Skip if slippage exceedsMin liquidity$0Disabled by default

Installation & Setup#

bash

clawhub install kalshi-fed-futures-arb-trader

Requires: SIMMER_API_KEY and SOLANA_PRIVATE_KEY environment variables.

Cron Schedule#

Cron is set to null -- the skill does not run on a schedule until you configure it in the Simmer UI.

Safety & Execution Mode#

The skill defaults to dry-run mode. Real trades only execute when --live is passed explicitly.

ScenarioModeFinancial riskpython trader.pyDry runNoneCron / automatonDry runNonepython trader.py --liveLive (Kalshi via DFlow)Real USDC

The automaton cron is set to null -- it does not run on a schedule until you configure it in the Simmer UI. autostart: false means it won't start automatically on install.

Required Credentials#

VariableRequiredNotesSIMMER_API_KEYYesTrading authority. Treat as a high-value credential.SOLANA_PRIVATE_KEYYesBase58-encoded Solana private key for live trading.

Tunables (Risk Parameters)#

All risk parameters are declared in clawhub.json as tunables and adjustable from the Simmer UI without code changes.

VariableDefaultPurposeSIMMER_FED_FUT_ENTRY_EDGE``0.08Min divergence between FedWatch and market to trigger tradeSIMMER_FED_FUT_EXIT_THRESHOLD``0.45Sell position when price reaches this levelSIMMER_FED_FUT_MAX_POSITION_USD``5.00Max USDC per tradeSIMMER_FED_FUT_MAX_TRADES_PER_RUN``3Max trades per execution cycleSIMMER_FED_FUT_SLIPPAGE_MAX``0.15Max slippage before skipping (0.15 = 15%)SIMMER_FED_FUT_MIN_LIQUIDITY``0Min market liquidity USD (0 = disabled)

Dependency#

simmer-sdk is published on PyPI by Simmer Markets.

• PyPI: https://pypi.org/project/simmer-sdk/
• GitHub: https://github.com/SpartanLabsXyz/simmer-sdk
• Publisher: hello@simmer.markets

Review the source before providing live credentials if you require full auditability.