Cantor Fitzgerald said on Aug. 19 that it has begun arranging institutional block trades in event contracts, a move that makes it one of the first full-service investment banks to broker prediction-market trades at institutional size on a Commodity Futures Trading Commission-regulated exchange.
Prediction markets were built largely on retail flow, and their order books still reflect that. For an institution trying to establish a position worth millions of dollars, using a thin central order book can move the price against the buyer or seller before the order is fully completed.
Cantor’s answer is the block trade: a large transaction negotiated privately and executed at a single price away from the public order book. The bank said it will act as an introducing broker, arranging execution for clients through Kalshi’s block trading framework. Susquehanna Predictions, the prediction-markets arm of Susquehanna International Group, will provide pricing and liquidity.
Cantor places the business inside Global Markets
The firm said the new business will operate within its Global Markets division under co-CEO and global head of equities Pascal Bandelier and fellow co-CEO Christian Wall. Cantor said it is applying the model it built in equities and fixed income to what it described as a new regulated asset class.
In the announcement, Bandelier said institutional participation in prediction markets has lagged even as the sector grows quickly because investors have lacked a way to transact at scale on a regulated exchange. “The liquidity is here,” he said.
Kalshi is the first venue for the business, and Cantor said it expects more venues to follow.
Max Crowley, Kalshi’s vice president of business development, said the exchange is looking for partners that can think creatively about how event contracts fit into client portfolios and how new use cases and hedging opportunities may develop around them.
Institutional infrastructure around prediction markets is expanding
The launch comes as firms build more institutional plumbing around prediction markets. Galaxy Digital has opened an over-the-counter desk for these contracts and completed a $10 million trade with Arca tied to outcomes related to the CLARITY Act. Crypto.com has also hired a Wall Street veteran to expand its own institutional prediction-markets business.
In the release, Susquehanna was described as the first quant trading firm to operate a dedicated prediction-markets arm. The firm said it expects the next wave of demand to come from hedging rather than speculation.
Joe Grubb, head of business development at Susquehanna Predictions, said the next area of material growth for prediction markets would be large institutional risk transfer.
He added that the firm can price and execute tailored contracts for counterparties seeking to hedge broad market risk as well as bespoke industry risk that, according to the release, is not currently served by traditional insurance markets.