Key facts
- Susquehanna International Group is creating a business focused on prediction markets.
- The initiative aims to establish prediction markets as a recognized asset class.
- The business will leverage data and analytics for forecasting.
- The venture aims to address illiquidity and shallow trading volumes in prediction markets.
Susquehanna International Group, a quantitative trading firm, is developing a business unit dedicated to prediction markets. The goal is to establish these markets as a recognized asset class, facilitating bets on various future events and outcomes. This initiative aims to tackle the current challenges of illiquidity and low trading volumes often seen in prediction markets, by employing sophisticated data analysis and forecasting techniques. The venture seeks to attract larger institutional investors, such as hedge funds, to this emerging market. Jeremy Maletz, Susquehanna's head of macro trading and prediction markets, discussed the firm's market-making business with Kalshi, how large investors could use prediction markets, what Susquehanna is observing in terms of flows, how a market-maker hedges risk on these contracts, and how it generates revenue.