prediction-market-live-ops

Prediction-Market Trading Doctrine

Hard-won operational knowledge from a live Kalshi campaign (Aug–Sep 2026:

crypto/commodity maker ladders, regime tilts, tennis dust vacuum — all

falsified honestly, infrastructure open-sourced). Reference implementation: https://github.com/agiprolabs/kalshi-stack.

Complements prediction-market-strategy (edge selection/sizing) — this skill

covers the OPERATIONAL side: validating, executing, and killing strategies

against a live venue without losing more than the lesson costs.

The prime directive

Every strategy decision is evidence-gated: backtest → paper → live micro-probe

→ ratchet. Each stage has a PRE-DECLARED kill condition with correctly

calibrated probability math, written down BEFORE the data arrives. When a

threshold turns out miscalibrated, correct it openly and re-declare — never

silently move a goalpost in either direction.

Backtest hygiene (each rule was violated once, expensively)

• **Print-replay EV of passive-fill strategies is an UPPER BOUND, never an

estimate.** The prints a resting order actually captures are an

adversely-selected sample of the tape (sweeps deep enough to reach your

queue skew toward true collapses). A tennis dust book that measured +125%/$

on prints went 0-for-78 live (P<2%). Only fill-conditioned live outcomes

validate a maker strategy.

• Time-series joins use the last bar ending ≤ the decision instant.

A candle containing the instant is look-ahead and will fabricate

covariates that vanish out-of-sample.

• Taker backtests need print-confirmed executability, not quoted-ask

edges — stale quotes create phantom fills.

• Any bucketed-PnL review includes a top-N-share column. Lottery-payoff

books concentrate EV; a "pattern" that is two elephant rounds is noise.

Same rule when a holdout "wins": check concentration before believing it.

• Early settlements are selection-biased toward losers (collapses end

fast; comebacks are long matches/rounds). Never read a verdict off the

fast-settling prefix.

• **Static tilts that flip sign between tape halves are regime bets, not

edges.** A conditioning scheme must beat baseline on BOTH halves and on

each individual day; pre-register the rules, no per-day fitting.

• Mirror/complement markets are the SAME bet — deduplicate before computing

independence-based probabilities.

Live execution rules (the incident ledger)

• Smoke-test every live order path with a real 1-lot round trip (place,

verify resting, cancel, verify gone) before any strategy trades through

it. Paper cannot exercise venue routing parameters. Cost: $0.01.

• Cancels must be truthful: distinguish cancelled / already-gone

(filled!) / failed. A 404 is not a cancel — it means wrong routing shard

or a fill-race. Swallowed cancel failures + re-anchor loops = runaway

position stacking (cost us $84 in one evening).

• Route the exchange shard (exchange_index) consistently on EVERY call

— placement, reads, cancels, collateral. Collateral must be pre-positioned

on the shard before orders.

• Measure rate limits empirically with dust orders (burst ladder +

sustained test). Advertised budgets can be 10× off effective per-order

cost. Pace bursts to the measured rate with retry-requeue on 429.

• post_only for any maker strategy — an "aggressive maker" price on a

market trading inside your band silently becomes a taker fill of a

different (unvalidated) trade. Tag and cohort maker vs taker fills

separately in all realized-EV accounting.

• Rails, always: halt-file checked before every order batch (cancel-all

on appearance), independent scheduler-driven drawdown breaker with

deposit-jump detection, per-order and per-market size caps with anomaly

ledger events, equity floor stand-down. The breaker baseline is set at

session start per the operator's stated loss tolerance.

• Queue priority is the product in penny/maker books. Synchronized-open

venues: NTP + fire at boundary+0 with a retry probe (measure the venue's

open-transition latency). Event-driven venues: push-based discovery

(lifecycle WebSocket channels) beats polling; a fresh market's book is

empty, so first-to-rest owns the level for its lifetime.

• Restart daemons at activity boundaries; mid-round restarts orphan

in-memory state (untracked orders, missed settlements).

• Geofencing is real: order-origin IP matters, categories differ

(sports/elections vs financials), and enforcement can change overnight.

Datacenter location is part of your compliance posture.

Scaling doctrine

• House-money ratchet: double size only when realized profit at the

current step covers the next step's incremental risk AND round-count and

EV-continuity gates pass. Drop back a step on trailing degradation.

• Measure the capacity curve (EV/$ by per-print cap) before believing

any scale projection; then the binding constraint is capture rate ×

measured pool, and capture rate is only measurable live.

• Fill quality is the untested link at every new size — the paper/live

EV-per-$ ratio at each step gates the next.

Experiment operations

• Cohort every fill (maker/taker, band, source) at write time — post-hoc

attribution is what lets a bug contaminate a verdict.

• Ship one variable at a time; changing size and placement logic in the same

window destroys attribution.

• Run A/B variants in paper against a frozen baseline (small-footprint

variant, shared rounds, EV/premium-$ as the scale-free judge).

• Log everything to append-only ledgers; reconcile realized PnL to the

venue's own fills/settlements, never to internal marks.

• Post results (wins AND falsifications) to the operator's channel; write a

decision record with evidence and reversal conditions for every ship,

retire, and kill.