On President Trump’s first day, he signed 26 executive orders alonsgside a bevy of other actions—memoranda, proclamations, and statements—that were mistaken as executive orders by reporters, sparking confusion amongst some prediction market traders.
Each type of executive action has a different administrative process. Executive orders must cite a president’s authority to issue orders to federal agencies and employees, while memoranda do not. Proclamations and statements, on the other hand, are largely informational. The confusion about which document was which led to heated exchanges on X, including accusations that Kalshi had miscountedd.
Kalshi: you probably shouldn't have your intern counting Executive Orders https://t.co/xb3kkF4Yct
— J Mark (@Pete_Monahan_JD) January 21, 2025
Even major news outlets reported conflicting figures. An ABC affiliate listed 40 executive orders, several of which were memoranda. WBAL TV reported 26 executive orders, and CNN broadly referred to the executive actions as a “flurry.” According to the the American Presidency Project, Trump signed exactly 26 executive orders on his first day in office, matching Kalshi’s count.
Discord debates and trader confusion
This confusion extended to Kalshi’s Discord channel, where traders debated the count of executive orders. Some users falsely claimed that Kalshi was “counting everything” from the White House website. Others questioned why Kalshi’s market settled on 26 executive orders and whether presidential pardons were being counted as separate orders.
Kalshi’s settlement terms were clear: the market counted only “executive orders, not executive actions.” While traders expressed confusion, there was no regulatory challenge to Kalshi’s decision. Unlike other prediction market platforms, Kalshi hasn’t faced disputes over market settlements, largely due to its strict adherence to CFTC regulations. Every Kalshi market specifies a third-party source for determining outcomes, ensuring clarity for participants.
Unclear settlement terms and regulatory challenges
In September 2024, crypto prediction market platform Polymarket asked whether Israel would invade Lebanon that month. Israel committed ground troops to Lebanon on Sept. 30, the final day of the month. The chance of an invasion reached the high 80s, but the market had not resolved, as Polymarket failed to define the word “invasion.”
Despite the widespread use of the term “invasion” in media reports and among Israeli officials, market traders had to vote on how the market should resolve. The largest currency holders in the market voted to resolve to “no” invasion, securing their payouts at the expense of the majority of traders who believed an invasion occurred by the settlement deadline.
Because it’s regulated by the CFTC, Kalshi must follow clear resolution criteria. Those settlement requirements have not entirely prevented confusion amongst traders when it comes to certain markets. However, unlike Polymarket, Kalshi hasn’t faced a large-scale dispute over whether it settled one of its markets correctly. The third-party source that Kalshi uses to decide its markets’ outcomes is always listed in each market’s rules, which certainly helps.
Prediction markets depend on precise settlement terms to ensure meaningful forecasts. A market predicting whether Trump would issue a pardon during his term differs fundamentally from one limited to his first 100 days. Ambiguities in definitions or timeframes can erode confidence and lead to disputes.
Kalshi’s executive order markets are a reminder that traders should diligently read into each market’s full settlement terms and underlyings. As prediction markets continue to grow in popularity, a clear understanding of resolution rules is crucial for avoiding confusion and fostering trust among participants.
