Hedging against price movements is old school. Cantor's roughly 3,000 institutional clients can now take a position on the event itself.
Cantor Fitzgerald & Co. launched institutional block trading in prediction markets, becoming one of the first full-service investment banks to give institutional clients access to event contracts on a CFTC-regulated exchange.
How the Partnership Works
According to the announcement made on August 19, Cantor will act as an Introducing Broker, arranging block trades in Kalshi's event contracts away from the exchange's central order book.
Susquehanna Predictions, the dedicated prediction-markets arm of Susquehanna International Group, will price the trades and provide liquidity.
The business is rolled out within Cantor's Global Markets division, under co-CEOs Pascal Bandelier and Christian Wall, who said the firm is applying "institutional access to new markets" built over "eighty years" in equities and fixed income to the new asset class.
Cantor expects to add trading venues beyond Kalshi over time.
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When the Event Itself Is a Risk
According to the Wall Street Journal, roughly 3,000 of Cantor's institutional clients, including hedge funds and family offices, will get access to Kalshi's event contracts, covering categories from weather and commodity prices to corporate results such as iPhone sales.
The appeal, Susquehanna's Joe Grubb said, is that prediction markets let investors be "much more creative with the types of hedging" than the price-based instruments they already use.
A fund concerned about iPhone sales, for instance, can take a position directly on whether sales exceed a stated threshold, rather than inferring the outcome from how Apple's stock reacts to earnings.
Institutional clients can also propose new contracts tailored to risks such as AI supply-chain disruptions or computing costs, the Journal says.
Part of a Broader Institutional Build-out
Cantor's launch extends a pattern of Wall Street intermediaries building institutional routes into prediction markets over the past year.
Clear Street has struck a similar partnership with Kalshi aimed at hedge funds, and Marex has done the same with both Kalshi and Polymarket. Meanwhile, Talos has connected market makers to Kalshi through its existing trading infrastructure.
In April, Kalshi completed its first custom block trade of this kind: a Houston-based environmental hedge fund took a position on the outcome of a California carbon-allowance auction, brokered by Greenlight Commodities with liquidity from Jump Trading.
Cantor has not given a timeline for extending block trading to venues beyond Kalshi, or for launching the custom contracts institutional clients have reportedly been discussing with the firm.
