Jump Trading Secures Equity Positions in Kalshi and Polymarket via Market-Making Agreements

Key Points

• Jump Trading will obtain minority equity positions in Kalshi and Polymarket via market-making partnerships.
• Polymarket equity allocation for Jump expands progressively according to trading volume contributions to American operations.
• Kalshi commands an $11bn valuation whilst Polymarket reached $9bn in recent funding.
• Susquehanna International Group pioneered trading firm participation as a prediction market liquidity provider.

Jump Trading plans to secure minority ownership positions in Kalshi Inc. and Polymarket following agreements that involve liquidity provision on both prediction-market platforms. The Chicago-based firm will function as a market-maker whilst deploying proprietary capital to facilitate trades and capture spreads between bid and ask prices.

Equity Structures in Jump Trading’s Investments

Kalshi’s arrangement grants Jump a predetermined equity allocation based on information from individuals familiar with the negotiations. Polymarket’s structure differs significantly as Jump’s ownership percentage increases proportionally with trading volume or capacity delivered to Polymarket’s American operations. Both transactions mirror venture capital structures where equity compensates for trading infrastructure and liquidity commitments. The proprietary trading powerhouse emerged in 1999 when two Chicago Mercantile Exchange floor traders established the company. Revenue streams flow from trading securities and derivatives across US Treasury instruments, futures contracts and digital assets. The firm deploys artificial intelligence models to execute strategies spanning multiple asset categories.

Recent funding activities pushed Kalshi’s valuation to $11bn. Polymarket achieved a $9bn valuation during its latest capital raise. Neither company revealed specific financial details regarding Jump Trading’s investment terms. Prediction-market platforms depend heavily on market-makers who ensure continuous liquidity through consistent bid and ask quotes. These firms deploy proprietary capital particularly when natural trading activity diminishes to maintain functional markets. Traditional venues including Nasdaq and the New York Stock Exchange compensate market-makers through volume-based incentives or rebate programmes.

Susquehanna International Group Enters Prediction Markets

Susquehanna International Group, managed by former professional gambler Jeff Yass, broke new ground in April 2024. The firm became the first major trading house to announce formal market-making activities for prediction markets through its Kalshi partnership. Jump’s prediction market entry signals expansion beyond conventional equities and established asset categories. The firm recently bolstered its workforce and allocated substantial resources while developing technology for event-based contracts under Commodity Futures Trading Commission oversight. Currently, over 20 employees concentrate exclusively on prediction market trading activities.

Kalshi disclosed that Super Bowl LX markets generated over $865.2m in trading volume. The massive activity spike caused processing delays for certain trades during the championship game. Real-time execution continued uninterrupted with the “Pro Football Champion” market alone handling slightly above $500m whilst 67% of participants backed the Seattle Seahawks for Super Bowl LX victory. Meanwhile Susquehanna International Group partnered with Robinhood Markets Inc. to acquire a controlling interest in LedgerX last year. This US-based derivatives exchange acquisition provided Robinhood and Susquehanna with essential infrastructure for listing and clearing event contracts. Susquehanna is committed to immediate liquidity provision ensuring customers access reliable trading counterparties from launch.