• Jump Trading, a major proprietary trading firm, is providing market-making liquidity on prediction platforms Kalshi and Polymarket, signaling a stealthy expansion into the surging sector.
  • The move comes as prediction markets handle billions in monthly volume, with Kalshi raising $1 billion at an $11 billion valuation and Polymarket securing $2 billion from Intercontinental Exchange (ICE).
  • Regulatory shifts, including a CFTC no-action letter, are enabling this growth, but state-level challenges persist, with Massachusetts recently issuing an injunction against Kalshi sports contracts.

Jump Trading, the Chicago-based proprietary trading giant known for its high-frequency and algorithmic prowess, has quietly begun providing market-making liquidity on prediction market platforms Kalshi and Polymarket, according to people familiar with the matter. The firm, which previously wound down its sports betting operations in 2023, is poised to gain stakes or expand further into these platforms amid explosive growth in the sector, with combined volumes hitting $7.4 billion in October alone.

Efforts to deepen its presence have accelerated as prediction markets evolve from niche crypto-native platforms to regulated, high-frequency trading hubs integrated with mainstream brokers. Jump's entry, enabled by its profitable core prop trading operations, offers better liquidity and pricing for retail bettors, while platforms like Kalshi expand into cultural bets through partnerships such as one with StockX for sneaker and collectible contracts. "It's a regime change," one trader noted, referencing meta-markets on Manifold that show 45% odds Polymarket will overtake Kalshi in U.S. volume by June 2026, up from 15% earlier this year.

Without this liquidity infusion, platforms might struggle to maintain competitive fees, which have dropped to as low as 0.01% on Polymarket compared to 1% elsewhere. The CFTC's September 2025 no-action letter, which treats event contracts as regulated derivatives, has been pivotal, allowing Polymarket's U.S. re-entry via its QCEX acquisition and setting the stage for Jump's involvement. However, state-level friction remains a snag, with cease-and-desist orders in Nevada and Connecticut, and a Massachusetts injunction in January 2026 labeling Kalshi sports contracts as "unlicensed gambling."

Jump's move builds on its historical ties to prediction markets, including backing early platform Sporttrade through its investment arm Jump Capital and running a London sports-betting team on Betfair until 2023. The firm declined to comment when reached, but industry observers point to short-term milestones like the CFTC's Event Contract Rule comments due March 15, 2026, and Polymarket's NYSE data feed launch in April 2026 as key tests for the sector's trajectory. Long-term, if federal preemption prevails, prediction markets could mature into a trillion-dollar asset class, with ICE's backing and low fees positioning Polymarket for dominance.

As volumes climb post-2024 election, other players like Robinhood are also entering the fray with acquisitions for their own exchanges, hinting at a broader institutional shift. For now, Jump's stealthy expansion underscores the high-stakes race to capitalize on what one source called "the ingenuity of event trading," even as regulatory hurdles loom.