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
- Load CME FedWatch implied probabilities per FOMC meeting
- Fetch Kalshi Fed rate decision markets
- Match markets to meetings and detect direction (cut vs hike)
- Compute edge:
fair_yes - market_price - 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
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: hello@simmer.markets
Review the source before providing live credentials if you require full auditability.