Cantor Fitzgerald is opening a new institutional gateway into prediction markets, launching a service that will allow hedge funds and other large investors to execute block trades in event contracts on Kalshi.
The global financial services firm and investment bank announced Wednesday that it will act as an introducing broker, arranging and facilitating institutional-sized trades through Kalshi‘s block-trading framework. The trades can be negotiated at a single price away from the exchange’s central order book, giving institutions a way to take larger positions without relying solely on liquidity available in the public market.
Susquehanna Predictions, part of Susquehanna International Group, will provide institutional-scale pricing and liquidity for the trades. Cantor said Kalshi will be the first prediction market available through the new service, with additional venues expected to follow.
“Prediction markets are growing rapidly, but institutional participation has not kept pace because investors have lacked the ability to transact at scale,” Pascal Bandelier, co-CEO and global head of equities at Cantor, said in the announcement. The company said the new service applies the institutional trading model it already uses in equity and fixed-income markets to event contracts.
Cantor brings Kalshi to thousands of institutional clients
Cantor has roughly 3,000 institutional clients, ranging from hedge funds to family offices, which manage investments for wealthy families, according to The Wall Street Journal. The firm will serve as a broker for those clients, buying or selling blocks of Kalshi event contracts and, in some cases, helping distribute positions to other investors through private negotiations.
The potential uses go well beyond the political and sports contracts that have driven much of prediction markets’ recent public attention. Bandelier told the WSJ that hedge funds have expressed interest in contracts tied directly to corporate metrics, such as iPhone sales, rather than predicting how Apple shares might respond to those figures. Family offices have looked at contracts tied to weather, crop production and oil prices as potential hedges against risks affecting their investments.
Institutions will also be able to propose markets tailored to risks they want to trade or hedge. Joe Grubb, head of business development at Susquehanna Predictions, cited artificial intelligence supply chains and computing power prices as other areas where event contracts could be used.
“We believe the next area of material growth for prediction markets will be large institutional risk transfer,” Grubb said in Cantor’s announcement. Susquehanna said customized event contracts could give institutional traders a way to hedge both broad market risks and industry-specific exposures that are not adequately covered by traditional insurance markets.
Institutional prediction market push was already underway
Cantor’s launch builds on a broader effort by Kalshi and other financial firms to make prediction markets more accessible to institutional investors. In May, Kalshi told Reuters that its institutional trading volume had grown 800% over the previous six months, driven by increased activity from asset managers, hedge funds, prime brokerages and other financial institutions.
Kalshi had also recently executed its first customized block trade, while some institutional contracts were already reaching several million dollars. Andy Ross, Kalshi’s head of institutional business, said the exchange was seeing increased demand for contracts that could hedge risks over the coming months, although attracting a broader institutional base remained in its early stages.
“We’re in the foothills of this, but we’re climbing pretty fast here,” Ross told Reuters.
Other firms have been building the infrastructure needed to connect those investors to prediction markets. Clear Street partnered with Kalshi to provide institutional clients access to event contracts, while trading technology provider Talos integrated Kalshi into its platform in July, giving select institutional clients access to algorithmic execution and block-trading tools.
Cantor was already involved in that effort. The investment bank advised Talos on aspects of the buildout of its institutional prediction market functionality. At the time, Cantor said prediction markets were developing into a “credible institutional asset class” and that firms entering early could help shape market structure, liquidity and execution standards.
Kalshi lowers threshold for institutional block-trade incentives
The Cantor launch comes as Kalshi is separately making its own block-trading incentives more accessible to institutional traders. In a CFTC filing Wednesday, the exchange amended its Block Trade Rebate Program to lower the qualifying threshold from 100,000 contracts to 50,000, matching Kalshi’s minimum size for a block trade.
Under the amended program, eligible trades of at least 50,000 contracts can receive rebates covering all maker and taker exchange trading fees, less other incentives earned during the month. Kalshi also extended the program’s expiration date from Sept. 1 to Oct. 1. The changes will take effect no earlier than 10 business days after the Aug. 19 filing.
Kalshi said it intends for the program to “accelerate institutional adoption of event contracts as a mechanism for hedging risk,” with larger block trades expected to eventually generate additional activity and liquidity on its central order book. Kalshi excludes sports contracts from the rebate program.
The filing does not mention Cantor or Susquehanna. Kalshi also did not indicate the amendment is specifically in connection with Cantor’s new service. However, its filing on the same day as Cantor’s launch underscores Kalshi’s broader effort to attract larger institutional trades alongside the new Wall Street distribution channels being built around its markets.
