The US Political Future Index (UPFI) provides a comprehensive, real-time measure of anticipated Republican versus Democratic political control across major US electoral offices. Built on prediction market data from Kalshi, UPFI aggregates market-based probabilities to deliver a forward-looking gauge of political sentiment and power distribution expectations.
UPFI exclusively uses Kalshi prediction market data, ensuring regulatory compliance through CFTC oversight and maintaining data consistency across all included markets.
The index employs a weighting methodology that reflects both political significance and market characteristics:
- Category Weights: Presidential (40%), Senate (30%), House (20%), Gubernatorial (8%), Mayoral (2%)
- Market Weights: Volume sensitivity, time to expiration, population representation, and inherent political impact
The index spans five major office categories across federal, state, and local levels, incorporating markets for Presidential elections, Senate races, House contests, Gubernatorial elections, and qualifying Mayoral races.
The full methodology of the index can be read here. We also regularly explore elements of the index in our notebook collection.
If you would like to see how different prices and weights affect the index we have provided the following spreadsheet, which can be accessed on Google Sheets or downloaded below.
Key Value Propositions
⚡ Real-Time Intelligence
- Updates every 5 minutes vs. polls that lag days/weeks
- Captures momentum shifts instantly as markets react to news
- 24/7 operation during critical political periods
💰 Financial Incentives Drive Accuracy
- Participants risk real money, sharpening predictions beyond free polls
- Studies show prediction markets consistently outperform traditional polling
- Aggregates "wisdom of crowds" with economic stakes
📊 Sophisticated Methodology
- Weighted across 5 electoral categories: Presidential (40%), Senate (30%), House (20%), Gubernatorial (8%), Mayoral (2%)
- Individual markets weighted by volume, time-to-expiration, population, and political impact
- Built on CFTC-regulated Kalshi data for compliance and reliability
🎯 Actionable for Multiple Audiences
- Traders: Spot political arbitrage opportunities between probabilities and asset prices
- Investors: Quantify sector risks (energy vs. renewables, healthcare, defense)
- Hedge Funds: Build strategies around probabilistic political outcomes
- Institutions: Hedge portfolio exposure to regulatory/policy shifts
Market Applications
Traditional Finance Integration
- Complement volatility measures like VIX with political risk metrics
- Enable structured products, ETFs, and derivatives based on political outcomes
- Create hedging instruments for election-sensitive sectors
Crypto & DeFi Opportunities
- Perpetual swaps on UPFI for leveraged political exposure
- Binary settlement markets ("Will UPFI exceed 105 by election day?")
- Cross-chain political risk products
Risk Management
- Portfolio construction based on political scenario modeling
- Sector rotation strategies tied to electoral probabilities
- Corporate planning around regulatory environment changes