Hudson River Trading, one of Wall Street's biggest market makers, has begun trading on Kalshi, joining a growing roster of institutional firms seeking opportunities in the booming prediction-market industry. The New York-based trading firm started transacting on Kalshi around a month ago, according to people familiar with the matter who declined to be identified because the information is private. The company did not respond to a request for comment.
The firm was also among the investors participating in Kalshi's latest $1 billion fundraising round, which valued the platform at $40 billion. HRT joins non-bank trading peers such as Jump Trading and Susquehanna International Group, which have formed teams to trade the novel derivatives. While sports betting has propelled Kalshi's volumes to new records, the platform also offers contracts tied to financial markets, where firms like HRT can draw on their existing trading expertise.
HRT's move into prediction markets is currently being run out of its futures team and has included trades in Kalshi's so-called up-down markets, where contracts pay out based on whether an asset rises or falls over a short period, two of the people said. The firm is not trading sports or other nonfinancial event contracts, they added. Exchanges like Kalshi and its biggest rival, Polymarket, have expanded quickly by taking wagers once the province of betting companies and turning them into regulated financial contracts. Kalshi recorded $60 billion in notional volumes in September, according to a Bloomberg analysis of trading data on Dune.
In their early days, prediction markets were too small to draw interest from Wall Street players. But the surge in popularity over the last year, and the addition of contracts tied to stocks and other financial instruments, have drawn more institutional firms. Founded in 2002, HRT uses its own technology and quantitative analysis to match buyers and sellers across asset classes and geographies. The company is known for its rapid rise through the ranks of proprietary trading firms, powered by its use of machine learning. It pulled in a record $11.4 billion in trading revenue in the second quarter.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing