U.S. investment bank Cantor Fitzgerald & Co. said on August 19 local time that it had begun brokering block trades for institutional investors on Kalshi, a prediction market regulated by the Commodity Futures Trading Commission (CFTC). Event contracts on prediction markets are products that pay out a set amount depending on whether a specific event, such as an election or an economic indicator, occurs. Cantor takes on the role of an Introducing Broker (IB) connecting institutional clients' orders to Kalshi, while Susquehanna Predictions provides the pricing and liquidity required for large orders. In a block trade, instead of splitting an order and submitting it to the public order book, the counterparties negotiate a single price away from the order book and then report the trade under Kalshi's rules. Under Kalshi's rules, both counterparties must be Eligible Contract Participants (ECPs) as defined by the U.S. Commodity Exchange Act, and when executing on behalf of a client, that client must explicitly instruct execution by way of a block trade. The current minimum trade size is 25,000 contracts, separate orders cannot in principle be aggregated to meet that threshold, and the seller or the broker must report the trade details within 15 minutes of the point at which both sides agreed to the trade. Cantor said it would start the service on Kalshi first and could expand to other exchanges, and according to CoinDesk, about 3,000 institutional clients can use this channel. The launch widens the path for institutions to trade or hedge the risk of policy, economic and industry events, but because of the minimum size and the ECP requirement, it is not available to all investors.
Cantor Begins Brokering Block Trades (Large-Lot Trades) on the Kalshi Prediction Market for Institutional Investors
Metanomia View
Once prediction markets move beyond retail betting and into institutional risk transfer, the right to discover the price of an event extends to larger pools of capital and professional liquidity providers. That said, Cantor and Susquehanna take on the gatekeeper role over access, execution and price liquidity, while Kalshi controls listing and settlement, and the way prices are formed in large trades and the transparency of after-the-fact disclosure will determine market trust. The threshold of a minimum of 25,000 contracts shows that the range of participation in this channel is limited from the outset. If Korea designs a Korean-style prediction market, it must also decide who lists the contracts, who monitors the use of inside information and market manipulation, and who bears responsibility for losses.