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Jump Trading, the Chicago-based proprietary trading firm, is deepening its involvement in prediction markets by taking equity stakes in two of the sector's fastest-growing platforms, according to reporting by Bloomberg.
The firm has struck separate agreements with both Kalshi and Polymarket –platforms that have exploded in popularity by enabling users to wager on everything from political elections to sporting events. In exchange for providing liquidity and trading capacity, Jump will receive equity in both companies.
The arrangement with Kalshi grants Jump a fixed equity stake, while the Polymarket deal is structured to grow based on the volume of trading liquidity Jump supplies to the U.S. exchange, Bloomberg reported, citing people familiar with the negotiations.
The dual investments underscore the financial viability of prediction markets, which have attracted significant institutional interest. Polymarket recently hit a $9 billion valuation, while Kalshi reached $11 billion in its latest fundraising.
Jump's entry into prediction markets represents a significant strategic move for the 25-year-old trading firm, which was founded by two former Chicago Mercantile Exchange pit traders. The company has substantially expanded its operations in the space in recent months, assembling a team of more than 20 traders dedicated to event contracts and building technology infrastructure to support the business, Bloomberg reported.
The deals operate as venture-style arrangements, a common structure where market-makers receive equity compensation rather than traditional fees for their trading activities. Market makers are essential to these platforms, using their own capital to take the opposite side of trades and keep markets functioning smoothly, particularly during periods of low liquidity or heightened uncertainty.
Jump's expansion follows similar moves by other trading heavyweights. Susquehanna International Group, the trading operation founded by former professional gambler Jeff Yass, publicly disclosed its market-making relationship with Kalshi in April 2024. Last year, Susquehanna and retail brokerage Robinhood Markets acquired a controlling stake in LedgerX, a U.S. derivatives exchange, positioning themselves to directly control the infrastructure for listing and clearing event contracts.
The prediction market sector has experienced rapid growth despite ongoing regulatory scrutiny. Kalshi and Polymarket offer contracts on outcomes ranging from election results to weather patterns, with volumes surging as the platforms have gained mainstream attention. The infrastructure supporting these markets remains fragmented, with platforms competing to attract both traders and the market-makers essential to their operations.
