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Cantor Fitzgerald & Co. has launched institutional access to block trading in prediction market contracts on Kalshi, with Bala Cynwyd-based Susquehanna Predictions providing pricing and liquidity for the transactions.
Cantor will serve as the introducing broker, arranging large trades for institutional clients. Clients can negotiate an entire block of event contracts at a single price outside Kalshi’s central order book. That can reduce the potential market impact of a large order.
Kalshi operates as a designated contract market under the oversight of the Commodity Futures Trading Commission (CFTC).
The partnership expands the role of a major Philadelphia-area trading firm as prediction markets continue moving beyond consumer trading and into institutional risk management.
How Kalshi block trades work
Block trades allow eligible counterparties to negotiate large transactions away from an exchange’s central order book. The agreed transaction is then reported to Kalshi under the exchange’s block trading rules.
Kalshi limits block-trade participation to eligible contract participants as defined under the Commodity Exchange Act. That designation allows access to institutions and other market participants that meet federal eligibility requirements.
Under the new arrangement, Cantor will arrange and facilitate the transactions. Susquehanna will provide pricing and institutional-scale liquidity, allowing clients to establish large positions with greater execution and price certainty.
Cantor is applying an institutional trading model already used across its equities and fixed-income businesses to event contracts. Kalshi will be the first exchange available through the service, with additional prediction market venues expected to follow.
The launch makes Cantor one of the first full-service investment banks to offer institutional block trading in prediction markets.
Cantor said institutional participation has lagged the broader growth of prediction markets. Investors lacked the ability to transact at scale on a regulated exchange. The new service provides that access through an institutional intermediary.
Why institutions may use event contracts
Event contracts allow institutions to take positions on specific economic, financial, or industry outcomes without relying on broader assets whose prices may be affected by several unrelated factors.
Contracts tied to financial markets, weather, or industry-specific outcomes could therefore be used to hedge risks that are difficult to isolate through conventional financial products or insurance.
Susquehanna says it can price and execute customized contracts addressing both general market risks and exposures specific to individual industries.
Joe Grubb, head of business development at Susquehanna Predictions, said he believes large-scale institutional risk transfer will become the prediction market industry’s next major area of growth.
Susquehanna established a dedicated prediction market trading desk in 2023 and describes itself as Kalshi’s flagship market maker. Its prediction market business provides liquidity across contracts involving finance, cryptocurrency, elections, culture, weather, and sports.
What the launch means for Pennsylvania
The institutional focus differs from the consumer sports contracts driving much of Pennsylvania’s prediction market debate.
The Pennsylvania Gaming Control Board argues that sports-event contracts resemble Pennsylvania sports betting and should face state licensing, taxation, and consumer-protection requirements.
State lawmakers have also proposed placing prediction markets under gaming board oversight.
Cantor and Susquehanna are emphasizing large trades, customized contracts, and financial hedging. However, the trades will initially take place on Kalshi, the same exchange offering the consumer sports contracts that Pennsylvania regulators continue to challenge.
The launch does not resolve whether sports-event contracts should be treated as gambling. It does show how Cantor and Susquehanna intend to position prediction markets as institutional risk-management tools rather than solely as a retail alternative to traditional sportsbooks.
