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Trading groups are expanding into the rapidly evolving realm of prediction markets, hiring traders to arbitrage fleeting price discrepancies between contracts for events such as football games and elections.
Trading volumes on online prediction markets, including Polymarket and Kalshi, exploded in the run-up to the 2024 US presidential election and have continued to surge over the past year as the two platforms have transformed into betting sites dominated by sports contracts.
Emboldened by the Trump administration’s light-touch approach to market regulation, some of Wall Street’s biggest names are now vying to cash in on the action themselves. In some cases, the groups have partnered with the prediction platforms to make markets and provide liquidity in certain contracts.
Don Wilson’s DRW is looking for a trader who will be paid a base salary of up to $200,000 to “monitor and trade active markets in real time” across Polymarket and Kalshi, according to a job advert posted last week, as it builds a “dedicated prediction markets desk”.
Options trading giant Susquehanna is on the hunt for traders to “detect incorrect fair values” and identify “unusual behaviours” and “inefficiencies” on prediction markets, as well as people to work on its dedicated sports trading desk. Crypto hedge fund Tyr Capital hopes to hire a prediction markets trader “who is already running sophisticated strategies”.
Trading houses are “definitely in growth mode” when it comes to prediction markets, said Madison Zitzner, vice-president of quantitative research and prop trading at recruitment firm Selby Jennings.
They “really want to understand the liquidity, the scalability that these types of strategies can bring”, she added.
Ed Hindi, chief investment officer of Tyr, said: “We are extremely bullish on prediction markets’ prospects, especially the monetary policy and economics data side of it over the coming couple of years.” DRW and Susquehanna did not respond to requests for comment.
Trading volumes in event contracts on prediction markets soared from less than $100mn a month in early 2024 to more than $8bn in December 2025.
Analysts said strict risk controls meant trading businesses would probably avoid placing direct bets on questions such as when US President Donald Trump will buy Greenland or which film will win the most Oscar awards in March.
A more attractive proposition is arbitraging between markets offering different prices for similar outcomes — mimicking how high-frequency traders exploit spreads on different stock exchanges.
“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,” said Joseph Saluzzi, co-founder of Themis Trading.
“In a market like this that’s so new, where different platforms are so siloed, there will be so many arbitrage opportunities,” he added.
Boaz Weinstein, the founder of hedge fund Saba Capital Management, said during a closed-door conference in October that prediction markets could allow portfolio managers to hedge their investments with a higher degree of specificity, especially on the probability of certain events.
This would allow investors to go “bigger” on trades, Weinstein said on stage next to Polymarket founder and chief executive Shayne Coplan.
Weinstein added that a few months earlier Polymarket showed a 50 per cent chance of a recession, while credit markets indicated a roughly 2 per cent risk. “You can come up with an infinite number of pair trades that you couldn’t do before,” he said.
A person familiar with the matter said Saba had “done nothing yet in prediction markets but watch”.
Most large multi-manager hedge funds have stayed on the sidelines, with the relative lack of liquidity on prediction markets — compared to the multitrillion-dollar markets for other asset classes — making it difficult to justify investing.
Big market-makers have been more enthusiastic. Led by billionaire Jeff Yass, Susquehanna was the first market-maker on Kalshi and has an event contracts tie-up with retail trading platform Robinhood. Participants in Kalshi’s market-maker programme receive “financial benefits, reduced fees, differing position limits and enhanced access” as incentives for providing liquidity on prediction markets, though the specifics of the arrangement are not publicly known.
Jump Trading and Amsterdam-based Flow Traders have also recently increased trading on prediction markets, according to people familiar with the matter. Flow declined to comment and Jump did not respond to a request for comment.
Other companies hiring prediction market traders include New York-based trading start-ups Kirin and Anti Capital, Chicago-based crypto investor Sfermion and Swiss trading group G-20 Advisors, which was recently hiring a quantitative engineer to “design models that estimate event probabilities, detect mispricing” and manage risk.
Flow, Jump, Sfermion, Kirin, Anti Capital and G-20 did not respond to requests for comment.
Polymarket has come under scrutiny since a mystery trader won more than $400,000 on a well-timed bet that Venezuelan strongman Nicolás Maduro would be captured by the US military in early January. In another incident last fall, a new user on Polymarket placed trades correctly predicting María Corina Machado as the winner of the Nobel Peace Prize just hours before the results were announced.
US Congress member Ritchie Torres has proposed legislation that would prohibit insiders “from engaging in covered transactions involving prediction market contracts”.