Clear Street, a broker to hedge funds and sophisticated traders, is partnering with Kalshi Inc. to give its clients access to event bets, as the fast-growing prediction markets industry seeks to increase its appeal to Wall Street.
Clear Street’s futures commission merchant will join Kalshi’s exchange and clearing house. The broker will also launch swap capabilities for exchange-traded fund issuers tied to prediction markets.
“Prediction markets are emerging as a regulated, fast-growing asset class, and our institutional clients want access to clearing, risk management and swap product capabilities for this growing space,” Andy Volz, chief commercial officer of Clear Street, said in a statement.
Prediction markets have soared in popularity on the back of strong interest from retail traders, drawn in by the ease of binary bets on everything from current affairs to award shows. Kalshi and Polymarket, the two leading platforms, processed $23.3 billion in notional trading volume last month, according to user-compiled data on Dune Analytics, with sports accounting for a majority of that figure.
The platforms say event contracts can be useful for businesses seeking a more precise way to hedge their exposure to real-world events such as weather or geopolitical turmoil. Kalshi completed its first block trade last month, a functionality that will likely make event contracts more appealing to institutions that need to deploy capital at scale.
For Clear Street, the expansion follows an aborted initial public offering earlier this year, which was pulled amid a selloff of brokerage stocks. The company had $1.1 billion of customer assets in its futures brokerage at the end of February, according to data from the Commodity Futures Trading Commission.
