Cantor Fitzgerald routes institutional block trades through Kalshi

Pascal Bandelier and Christian Wall made an announcement on August 19 that most investment banks have spent the last two years avoiding. Cantor Fitzgerald & Co. would act as an introducing broker for event contracts on Kalshi, arranging block trades away from the exchange's central order book, with Susquehanna Predictions providing liquidity on the other side.

The structure matters more than the headline. Block trading away from the order book is how institutional size moves in fixed income and equities without printing a price that moves the market against the buyer. Cantor is importing that infrastructure wholesale into a venue that, until recently, retail traders treated as a novelty. The roughly 3,000 institutional clients now with access — hedge funds, family offices — are not being invited to speculate alongside retail. They are being offered a separate channel with separate mechanics.

Susquehanna's Joe Grubb described the appeal as letting investors be more creative with hedging than price-based instruments allow. The example given was iPhone sales: rather than inferring the outcome from Apple's stock reaction to earnings, a fund can take a position directly on whether sales clear a stated threshold. That is not a trivial distinction. Stock price absorbs multiple signals simultaneously — margins, guidance, buybacks, macro sentiment. A binary contract on unit sales isolates the variable the fund actually cares about. The hedge is cleaner.

What the announcement does not resolve is how clean the regulatory footing is for that hedge. Kalshi holds CFTC designation as a designated contract market, and block trades on a DCM are a known structure. But the states that have challenged Kalshi's authority in recent months — Nevada pursuing fines, Connecticut denying emergency injunctive relief, Washington ordering a halt to most markets — have not uniformly accepted that federal designation as the end of the conversation. Cantor is routing institutional money into a venue that is simultaneously in federal appeals court and absorbing state enforcement actions. That is not a reason to avoid the trade. It is a reason to understand exactly which contracts are settled under which framework before the trade is on.

The custom contract pipeline is where the jurisdictional question gets sharper. Institutional clients have reportedly been discussing tailored contracts with Cantor covering AI supply-chain disruptions and computing costs. Those are not weather contracts or commodity price markers. They are event contracts on outcomes in industries with active regulatory conversations of their own. Whether the CFTC's event contract framework extends cleanly to bespoke AI infrastructure outcomes — and whether a court asked to enforce one would agree — is a question the April California carbon-allowance block trade did not answer. That trade involved an established auction mechanism with a known resolution date. Computing costs do not resolve the same way.

The reporting is treating this as a distribution story: Wall Street finally opens the door to prediction markets. I think the more consequential development is that Susquehanna Predictions is now the named liquidity provider for institutional size on Kalshi. Susquehanna has operated in prediction markets longer than most of the venues that now exist. Having them as the explicit pricing engine for block trades means the institutional channel has a counterparty that understands how these contracts actually clear — which is a different thing from having a bank that is willing to introduce the order.