Why Susquehanna Is Building a Prediction Markets Business

June 6, 2026

AI Summary

5 min read

Susquehanna, the giant options market maker, is quietly trying to solve a chicken-and-egg problem in prediction markets. The firm sees a world where an airline could hedge snowfall risk or a manufacturer could hedge a trade-war tariff — not by trading a futures contract that took a year to list, but by using a prediction market contract that launched in a day. The obstacle is that these markets currently have too little volume for serious institutional hedging. Jeremy Malletz, head of prediction markets at Susquehanna, argues that the firm's role is to bridge that gap: provide the liquidity, warehouse the risk, and shepherd other institutions in.

What Susquehanna Actually Does in Prediction Markets

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What you'll learn

1 (04:06) **What the Prediction Markets Desk Does** - Jeremy Malletz explains Susquehanna's two-pronged role: providing liquidity as a market maker and acting as a shepherd to bring other institutions into the ecosystem.
2 (05:04) **Susquehanna's Core Business & Culture** - Malletz describes Susquehanna as a market-making firm, with options as its bread and butter, and a culture of thinking in Bayesian probabilities.
3 (06:17) **Why Prediction Markets Need Market Makers** - Explains the function of a market maker in bridging the gap between buyers and sellers across time and size.
4 (07:27) **Balance Sheet and Risk Appetite** - Malletz discusses Susquehanna's capital advantage and willingness to take directional risk.
5 (09:02) **The Core Challenge: Bootstrapping Institutional Liquidity** - Addresses the "multi-billion dollar question" of how to move from retail sports betting to useful hedging instruments for corporations.
6 (11:52) **Institutional Reluctance and Onboarding** - Discusses the main barriers for institutional players: awareness, compliance, and legal uncertainty.
7 (13:23) **The Off-Platform Trade Possibility** - Malletz confirms that off-platform trades (e.g., swaps) are possible, allowing for much larger size than what is printed on the exchange.

+ Full timestamped outline available in the app

Show Notes

Prediction markets that enable you to bet on pretty much everything are everywhere nowadays. But there's still a big question over whether they can expand to include larger institutional investors like hedge funds. Part of the problem is that a lot of prediction market contracts are illiquid and trading volumes can sometimes be shallow. That's where trading firm Susquehanna International Group comes in. In this episode, recorded live at New York's City Winery, we talk to Jeremy Maletz, Susquehanna's head of macro trading and prediction markets, about the firm's market-making business with Kalshi. We talk about how big investors could use prediction markets, what Susquehanna is seeing in terms of flows, how a market-maker hedges risk on these contracts, and how it makes money from them.

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