Kalshi Fed Futures Arb Trader

Compares CME FedWatch implied rate probabilities to Kalshi Fed rate decision market prices and trades when divergence exceeds threshold. Requires SIMMER_API_KEY and simmer-sdk. Use when you want to capture alpha from FedWatch-vs-Kalshi pricing gaps on rate decisions.

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)

Meeting	FedWatch P(cut)	Kalshi P	Edge	Action
Jun 2026	35%	25%	+10%	BUY YES
Sep 2026	68%	70%	-2%	Hold
Dec 2026	82%	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

Parameter	Default	Notes
Entry edge	8%	Min FedWatch-vs-Kalshi divergence to trade
Exit threshold	45%	Sell when position price reaches this
Max position size	$5.00 USDC	Per market
Max trades per run	3	Rate limiting
Max slippage	15%	Skip if slippage exceeds
Min liquidity	$0	Disabled 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.

Scenario	Mode	Financial risk
python trader.py	Dry run	None
Cron / automaton	Dry run	None
python trader.py --live	Live (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

Variable	Required	Notes
SIMMER_API_KEY	Yes	Trading authority. Treat as a high-value credential.
SOLANA_PRIVATE_KEY	Yes	Base58-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.

Variable	Default	Purpose
SIMMER_FED_FUT_ENTRY_EDGE	0.08	Min divergence between FedWatch and market to trigger trade
SIMMER_FED_FUT_EXIT_THRESHOLD	0.45	Sell position when price reaches this level
SIMMER_FED_FUT_MAX_POSITION_USD	5.00	Max USDC per trade
SIMMER_FED_FUT_MAX_TRADES_PER_RUN	3	Max trades per execution cycle
SIMMER_FED_FUT_SLIPPAGE_MAX	0.15	Max slippage before skipping (0.15 = 15%)
SIMMER_FED_FUT_MIN_LIQUIDITY	0	Min 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: [e-mail]

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