Why Susquehanna Is Building a Prediction Market Business | Odd Lots

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. Chapters: 00:00:00 - Cold Open 00:00:56 - Introduction - Odd Lots Live 00:03:20 - Susquehanna's Prediction Markets Role 00:05:59 - Market Making Mechanics 00:08:15 - Institutional Hedging Challenge 00:11:04 - Institutional Adoption Barriers 00:13:39 - Market Selection Strategy 00:15:44 - Market Evolution and Growth 00:19:08 - Insider Trading Concerns 00:22:39 - Market Manipulation and Whale Concerns 00:24:53 - Market Selection Process 00:27:15 - Speed to Market Innovation 00:29:12 - Role Evolution and Election Trading 00:30:42 - End Credits Watch Bloomberg Vodcasts:    • Bloomberg Video Podcasts | Interviews & More   Watch more Odd Lots episodes:    • Odd Lots   Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Monday and Thursday for interviews with the most interesting minds in finance, economics and markets. Join the conversation: discord.gg/oddlots Subscribe to Bloomberg Podcasts: https://bit.ly/BloombergPodcasts Check out more Odd Lots:    • Odd Lots (Audio)   Get the Odd Lots newsletter: https://www.bloomberg.com/account/new... And for all things Odd Lots, visit https://www.bloomberg.com/oddlots #Investing #Markets #Finance #Bloomberg #Podcast #OddLots Visit us: https://www.bloomberg.com/podcasts For coverage on news, markets and more: http://www.bloomberg.com/video Visit our other YouTube channels: Bloomberg Television:    / @markets   Bloomberg Originals:    / bloomberg