Wall Street firms build to trade differences between similar contracts on prediction platforms

Wall Street is staffing up its trading floors to go after pricing gaps across prediction markets, targeting spreads between contracts tied to things like sports and elections.

Traders are hired to catch split-second price differences on platforms like Polymarket and Kalshi, and flip them for profit.

Both platforms have moved toward sports-heavy contracts after first getting really popular during the 2024 presidential election, and trading volume has exploded.

Back in early 2024, they were pulling in under $100 million a month. By December 2025, that shot up to over $8 billion.

Trading companies ramp up hiring for dedicated prediction desks

One of the most aggressive is DRW, Don Wilson’s company. They’re offering up to $200,000 in base pay for a trader to handle markets on Polymarket and Kalshi in real time. The posting says they’re building a “dedicated prediction markets desk.”

Susquehanna, which already runs a sports trading desk, is also expanding. They’re hiring people to spot “incorrect fair values,” catch “unusual behaviors”, and flag “inefficiencies.” The company wants traders who know how to read noise and turn it into edge.

Tyr Capital, a crypto hedge fund, is going after people who are already running “sophisticated strategies.” They’re not teaching. They want people who can walk in and plug into their system. Ed Hindi, their CIO, said they’re “extremely bullish on prediction markets’ prospects, especially the monetary policy and economics data side of it over the coming couple of years.”

Madison Zitzner, vice president of quantitative research and prop trading at Selby Jennings, said companies are clearly in “growth mode.” She added, “They really want to understand the liquidity, the scalability that these types of strategies can bring.”

New players are popping up too.

Start-ups like Kirin and Anti Capital in New York, crypto investor Sfermion in Chicago, and Swiss-based G-20 Advisors are all hiring. G-20 wants a quantitative engineer to “design models that estimate event probabilities, detect mispricing” and manage risk.

The activity is high, but it’s not wild betting. Analysts say companies are skipping the weird contracts, like when President Donald Trump might buy Greenland, or who’ll win the Oscars. Instead, they’re focusing on arbitrage; buying low on one platform, selling high on another. Just like high-frequency traders do with stocks.

Joseph Saluzzi, co-founder of Themis Trading, said, “The big guys are going to be trading one market versus another, they’re not going to be throwing darts at a dartboard, betting that Trump will invade whichever country.” He added, “In a market like this that’s so new, where different platforms are so siloed, there will be so many arbitrage opportunities.”

Wall Street sees arbitrage potential despite liquidity issues

Some are still cautious. Boaz Weinstein, founder of Saba Capital, spoke at a closed-door conference in October and said prediction markets can help hedge portfolios more precisely.

Standing beside Polymarket CEO Shayne Coplan, he said managers could go “bigger” on trades when they’re sure of the odds.

He gave one example: Polymarket showed a 50% chance of a recession, while credit markets showed just 2%.

That kind of gap, he said, creates “an infinite number of pair trades that you couldn’t do before.” Still, someone close to Saba said the fund had “done nothing yet in prediction markets but watch.”

Most large hedge funds are still on the sidelines. It’s mostly because of the liquidity gap. Compared to trillions in other markets, prediction markets are still small, and that makes it hard to allocate serious cash.

But market-makers don’t care. They’ve already jumped in. Susquehanna, led by Jeff Yass, was Kalshi’s first market-maker. They also have a deal with Robinhood for event contracts. Kalshi gives market-makers perks: lower fees, special limits, better access. The full terms aren’t public.

Other trading giants are scaling up too. Jump Trading and Flow Traders, based in Amsterdam, are active.

There’s also been controversy. A mystery trader on Polymarket made over $400,000 betting on Nicolás Maduro being captured by the US military in early January.

Last fall, a new user placed winning trades predicting María Corina Machado would win the Nobel Peace Prize, hours before it was announced.

Congress has noticed. Ritchie Torres, a member of the House, has proposed a bill that would ban insiders from trading on prediction markets. The bill would stop those with non-public info from engaging in “covered transactions involving prediction market contracts.”

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