Cantor Fitzgerald & Co. has started institutional trading for prediction markets, giving its clients block trading in event contracts on Kalshi, the CFTC-regulated exchange. The bank works as an introducing broker, arranging institutional-size blocks off the central order book, with one price agreed for the whole size.
Liquidity and quotes for the business come from Susquehanna Predictions, part of Susquehanna International Group. The firm calls itself the first quantitative trading company with a separate prediction market business. Joe Grubb, head of business development at Susquehanna Predictions, expects the next serious growth to come from large institutional risk transfer. The firm is ready to price and execute custom contracts hedging broad market and sector risk that traditional insurance markets do not cover.
Cantor is moving onto prediction markets a model it has run in equities and bonds, and runs the line through Global Markets. Block trades start on Kalshi only, other venues are planned. Pascal Bandelier, co-head and global head of equities at Cantor, said the bank has spent more than eighty years building institutional access to new markets and prediction markets are next. The market is growing quickly. Institutional participation is not. Investors had no way to trade large size on a regulated exchange.
Max Crowley, vice president of business development at Kalshi, said Cantor's connections and its experience in equities and debt will help widen the use of event contracts.
Prediction markets are moving past retail. Financial firms increasingly treat event contracts as a hedging and risk management tool. For operators that means event contracts are settling in as an institutional product, and the fight for audience budgets with the betting segment will intensify.
