Quick answer
Event contract: An event contract is a derivative whose payoff is tied to whether a specified event occurs (an election result, a rate decision, a game outcome) rather than to the price of an asset.
Also called: event-based contract
Explained, with an example
Most event contracts are binary: they pay a fixed amount if the event happens and nothing otherwise. In the US they are listed on CFTC-regulated exchanges; Kalshi was designated as a contract market for this purpose in November 2020 [1]. Polymarket's markets work the same way economically: each outcome token redeems for $1 if it wins and becomes worthless if it loses [2].
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Frequently asked questions
What is an event contract?
An event contract is a derivative whose payoff is tied to whether a specified event occurs (an election result, a rate decision, a game outcome) rather than to the price of an asset.
About this guide
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Author: Ken Lin · Corrections: if you spot an error, we review it and date-stamp the fix.
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Sources
- CFTC Designates KalshiEX LLC as a Contract Market (4 Nov 2020) — U.S. CFTC, accessed 2 Nov 2026
- Resolution — Polymarket Documentation, accessed 2 Nov 2026