Wall Street is entering the prediction market with a $200,000 annual salary offer

The shift has arrived. Prediction markets once shaped by political loyalists, retail speculators, and arbitrage hunters are now seeing the rise of a new, silent, and formidable class of participants.

As reported by the Financial Times on Thursday, top trading firms such as DRW, Susquehanna, and Tyr Capital are building dedicated teams for prediction market trading.

DRW recently posted job openings offering base salaries up to $200,000 for traders able to “monitor and trade active markets in real time” on platforms like Polymarket and Kalshi.

Susquehanna, a leading options trading firm, is hiring prediction market traders who can “detect incorrect fair value,” identify “anomalous behavior” and “inefficiencies,” and is also forming a specialized sports trading team.

Crypto hedge fund Tyr Capital is actively recruiting prediction market traders who are “already deploying complex strategies.”

These expansion efforts are backed by hard data.

Monthly trading volume has soared from under $100 million at the start of 2024 to over $8 billion by December 2025. On January 12, a single-day trading volume hit a record $701.7 million.

Once liquidity pools grow deep enough to support institutional scale, Wall Street’s entry is inevitable.

Arbitrage Takes Priority

Institutions and retail traders play fundamentally different games in prediction markets.

Retail traders tend to rely on fragmented information to bet on individual outcomes—essentially gambling. Institutions, meanwhile, focus on cross-platform arbitrage and structural market opportunities.

In October 2025, Boaz Weinstein, founder of Saba Capital Management, noted in a private meeting that prediction markets enable portfolio managers to hedge investments with greater precision, especially for specific event probabilities.

Standing beside Polymarket CEO Shayne Coplan, Weinstein remarked, “A few months ago, Polymarket showed a 50% chance of recession, while the credit market priced the risk at just 2%. You can now design countless paired trades that were previously impossible.”

Weinstein explained that hedge fund managers can buy “no recession” contracts on Polymarket, which are relatively cheap since the market assigns a 50% recession probability.

At the same time, they can short bonds or credit products in the credit market that would plunge in a recession, since the credit market assigns only a 2% probability to recession and these assets remain highly priced.

If a recession hits, there may be a small loss on Polymarket, but a substantial gain in the credit market as overpriced bonds collapse.

If there’s no recession, profits accrue on Polymarket, and there may be a minor loss in the credit market, but overall the strategy remains profitable.

The advent of prediction markets has introduced a new “price discovery tool” to traditional finance.

Rise of the Privileged Class

Rule-based privileges are further tipping the scales.

Susquehanna became Kalshi’s first market maker and secured an event contract agreement with Robinhood.

Kalshi provides market makers with significant advantages: lower fees, special trading limits, and more streamlined trading channels. Specific terms remain undisclosed.

Market makers will rapidly reshape this sector.

Liquidity shortages have long plagued prediction markets, especially for niche events. Traders seeking significant contract volumes often faced wide bid-ask spreads or couldn’t find counterparties at all.

Professional firms will quickly eliminate obvious pricing errors. Price gaps for the same event across platforms or irrational probability pricing will be swiftly arbitraged away.

This spells trouble for retail traders. Previously, you could spot “Trump wins” contracts priced at 60% probability on Polymarket and 55% on Kalshi, enabling simple arbitrage. Such opportunities will soon vanish.

With Wall Street’s PhDs commanding six-figure salaries, prediction contracts are poised to enter a new era of professionalization and diversification, moving beyond single-event bets to offerings such as:

1. Multi-event combination contracts, similar to parlay bets in sports

2. Time series contracts, predicting an event’s likelihood within a set timeframe

3. Conditional probability products, estimating the chance of B occurring if A happens

History shows a familiar pattern: from forex to futures to crypto, every emerging market is sparked by retail traders but ultimately overtaken by institutions.

Prediction markets are following the same path. Technical superiority, capital scale, and privileged access will determine who endures in this probability-driven game.

Retail traders may still find opportunities in long-term forecasts or niche areas, but the reality is clear—once Wall Street’s precision engines run at full speed, the era of easy gains from information gaps is likely over.

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