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Odd Lots · June 6, 2026 · 31m

Why Susquehanna Is Building a Prediction Markets Business

Jeremy Maletz
Show Notes

Jeremy Maletz, head of macro trading and prediction markets at Susquehanna International Group, discusses how the trading firm is solving liquidity problems in prediction markets through market-making with Kalshi. The conversation covers institutional adoption barriers, how large investors could use prediction markets, current trading flows, risk hedging strategies, and the economics of market-making in these emerging contracts.

This summary was generated from show notes and public descriptions, not from a full transcript review. Details may contain inaccuracies.

Curious

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Prediction Markets Solve Institutional Information Aggregation Problem
Institutional investors can use prediction markets as a mechanism to aggregate and monetize information, similar to how prediction markets aggregate distributed knowledge for price discovery.
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Prediction Markets as Macro Information Channels for Institutions
Institutional investors can use prediction markets as real-time price signals for macro outcomes (inflation, elections, geopolitical events) without traditional forecasting infrastructure.
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Highlights

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Liquidity Is the Core Constraint for Institutional Adoption of Prediction Markets
Prediction markets remain illiquid and shallow in trading volumes, preventing large institutional investors from deploying meaningful capital without moving prices.
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Editorial

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Market-Making Economics: Liquidity Provision Creates Viable Business Model
Susquehanna's market-making business model in prediction markets works by providing two-sided liquidity and capturing the bid-ask spread, similar to traditional market-making but applied to binary contracts.
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Prediction Market Contracts Are Non-Standard, Creating Operational Complexity
Prediction market contracts vary widely in their structure, settlement terms, and duration, creating operational and hedging complexity that traditional market-makers must solve.
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Misc

✧Recorded live at New York's City Winery — informal, accessible setting for a technical finance topic
✧Focus on institutional adoption gap: retail prediction markets exist, but institutional capital hasn't fully entered
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