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The Exchange That Can Price Everything
I love the name. Kalshi. It comes from the Arabic colloquial expression "kull shi," roughly meaning ‘everything’. The implied ambition is that Kalshi could offer a price in everything, and it is starting to.
Andy Ross, Head of Institutional, Kalshi
When Andy Ross went quiet after leaving his role as head of prime brokerage at Standard Chartered earlier this year, and his LinkedIn showed him as "Gone Skiing" the assumption was that he would surface in a senior digital asset role somewhere. (I have seen many people with years under their belt in the TradFi / FX space move into digital assets over the past few years). Andy spent 16 years at Morgan Stanley, built CurveGlobal from the ground up, and held one of the more senior prime brokerage seats in the market. When it became clear he had moved into prediction markets, joining Kalshi as Head of Institutional Business in March, I cheered him on. This was a maverick move, to a maverick company, and I was excited for him. I admire mavericks, mostly.
"I loved on a personal level being part of a small, focused, highly talented organisation," he told me. "The quality of the team and the engagement is just phenomenal."
In his LinkedIn post announcing the move, Andy described the Kalshi team as having "the kind of energy that makes you want to be in the room."
I spoke to Andy to find out what Kalshi is building and what it means for the institutional market.
What Is Kalshi?
For anyone not yet familiar with the platform, Kalshi is a CFTC-regulated prediction markets exchange founded in 2018 by two MIT graduates, Tarek Mansour and Luana Lopes Lara, who met at university and bonded over a shared obsession with uncertainty. Between them they identified a gap that Wall Street had left open for decades: a regulated exchange where participants could hedge against real-world events directly, rather than through imperfect proxies. In 2019 Kalshi was accepted into Y Combinator’s Winter batch and launched the Beta version of the platform later that year.
Tarek Mansour and Luana Lopes Lara in the back of a friend's van
on the way to their Y Combinator pitch in 2019, travelling cheap to save money.
Early days: The first Kalshi team in their New York office, 2021.
As their website explains, “Achieving regulatory approval was a core goal for Kalshi from the outset. In 2020, Kalshi made history by becoming the first fully regulated financial exchange in the U.S. specifically for event contracts.”
Kalshi operates as a Designated Contract Market, the same regulatory classification as the CME and Intercontinental Exchange (ICE), making it the only federally regulated exchange of its kind. In general, users trade event contracts that pay out in full if a specified outcome occurs, and nothing if it does not. In other words, these are usually binary contracts with binary outcomes.
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The events that can be traded cover a wide range of outcomes: from the exotic to the more serious. There is currently a market on whether there will be a major meteor strike to hit Earth before 2030. (Apparently there is more probability of this happening than not.) If you are worried about that sort of thing, you could take a ‘Yes’ position on this market and perhaps relax a little thinking you will gain something from such a catastrophic event (Rules: If a major meteor (10 kilotons TNT equivalent or greater) hits Earth before Jan 1, 2030, then the market resolves to Yes. Outcome verified from NASA).
Also, events such as Federal Reserve rate decisions, inflation prints, employment data, elections, political events, sports results, weather, commodity prices, cryptocurrency moves, and, increasingly, bespoke hedges for institutional risks that do not exist anywhere else in the market. If there is a measurable, verifiable outcome with financial relevance to someone, Kalshi is likely either listing it or considering it. Every contract settles against a publicly disclosed data source with no ambiguity and transparent rules.
Kalshi raised one billion dollars in a Series F last month at a USD $22 billion valuation, double where it was five months ago. Investors include Coatue, Sequoia, Andreessen Horowitz, Paradigm and Morgan Stanley. The Chicago Federal Reserve published independent research concluding that Kalshi's market data is the highest quality available for the events it covers, beating consensus-based forecasting methods including the analyst surveys that Bloomberg and others have long treated as the industry standard. Institutional trading volume is up 800 per cent in six months.
“The single most important disruptive force in financial markets since…”
In his LinkedIn post announcing the move to Kalshi, Andy called prediction markets "the single most important disruptive force in financial markets since the development of the eurodollar future." I kind of got it, but I wanted him to explain in his own words why he sees prediction markets as so disruptive. He gave me two main reasons.
The first is personal. Andy has teenage kids (as do I) and he is concerned, as a parent should be, about what social media algorithms are doing to the way young people understand the world. "What they see on the phone, on X, Instagram, TikTok, is delivered by an algorithm that is not controlled by market forces. It's controlled by the people who are controlling TikTok. And I think that has the ability to be very polarising to society."
Kalshi, he argues, cuts through that. It does not care about your opinion. It does not amplify the loudest voice. It only cares whether you are willing to put money behind your view and whether you turn out to be right.
"What I love about Kalshi is it doesn't care about whether you have an opinion. It doesn't care how much you shout. It just cares about whether you've got some money put there and to be right. Because if you're continually right, you have more money to put there. And if you're wrong, then you don't."
The second reason was based on experience. Andy was at Morgan Stanley when Trump became US President in 2016. Wall Street's consensus assumption was that a Trump victory would be bad for equities, so the standard hedge was to sell the S&P 500. Trump won, and stocks rallied hard. The hedge failed on both counts: the probability assessment was wrong, and the direction of the trade was wrong.
"Not just the evaluation of his chances was wrong, but the hedge was wrong. People were taking a hedge that was absolutely a derivative of the underlying risk that they were actually wanting to manage. What Kalshi does is it gives you the ability, in weather, in politics, in financial KPIs, to actually trade the thing you care about, rather than the thing you don't care about."
In other words, selling the S&P to hedge a political outcome is an indirect bet at best. The S&P is moved by hundreds of factors beyond who wins an election. What Andy saw was the gap between the risk you actually want to manage and the blunt instruments available to manage it. Kalshi closes that gap by letting you trade the outcome itself.
The blunt proxy hedge problem can be expensive. What prediction markets offer is a direct link between the risk and the instrument. The range of problems that structure could solve in financial markets looks, potentially, limitless.
Regulated, Cleared and Fully Supervised
Kalshi is a CFTC Designated Contract Market with its own CFTC approved clearing house, Kalshi Klear, which operates as a Derivatives Clearing Organisation. One of the most tangible benefits of bringing clearing in-house is the interest accrual programme that Kalshi Klear makes possible. Participants currently earn 3.25% APY on their holdings, a variable rate that applies not just to available cash but to the underlying collateral on open positions as well. In other words, your margin earns a return while your trade is live, before the market even resolves. Interest accrues daily and is paid monthly. (It is worth noting that eligibility is currently restricted to US persons and territories, which is another reason why the UK and European regulatory question matters so much for international institutional participants.)
Every participant goes through full KYC and AML. Client money sits in segregated accounts, not on Kalshi's balance sheet. The prediction markets space has grown rapidly, hitherto largely driven by crypto-native platforms like Polymarket, Kalshi's closest proxy, which operates on the blockchain and sits outside the regulated financial system entirely. (Polymarket does significant volume too, but has no mandatory KYC, no central clearing, and US persons are technically prohibited from using it. For regulated institutional participants, it is simply inaccessible.)
Approximately 18 months ago, Kalshi successfully sued the CFTC to secure the right to list political event contracts. That legal battle raised the firm's profile considerably and opened up one of its biggest product categories.
"Being out of it [a regulatory framework] was never an option for the firm. It's a core tenet of the organisation," Andy says.
In May 2026, the US Congress opened a formal probe into both Kalshi and Polymarket, targeting KYC procedures and trade surveillance practices. Andy did not flinch when the subject came up: a fully KYC'd, CFTC-supervised exchange with mandatory AML and segregated client accounts is precisely the structure that a congressional inquiry should find the least to complain about.
As institutional money moves into this space, the compliance and counterparty identification requirements of regulated participants should make a fully supervised onshore exchange the only viable destination for serious flow, with that structural advantage compounding over time.
The Leverage Question
If Kalshi is to make significant inroads into the institutional space, leverage will be essential. A lot of capital could be tied up to make anything like serious money on longer-dated outcomes.
Here’s how it works. In general, if a market is priced at 50-50, you put down 50 cents for every dollar of exposure. Your counterparty puts down the other 50 cents. Both amounts sit in a segregated account until settlement, with Kalshi paying interest on funds held in the account while the position is live.
Contract prices move as the perceived probability of the outcome shifts. If you buy a contract at 50 cents and new information emerges that makes the outcome more likely, the contract price rises toward $1. If the outcome becomes less likely, the price falls toward zero. The contract price at any given moment is essentially the market's collective view of the probability of the event occurring, expressed in cents.
Because every position is held against Kalshi's central clearing house rather than a specific counterparty, participants can exit at any time by selling their contract into the open market at whatever price the market is currently offering. At settlement, the winner receives the full dollar: their own stake returned plus the counterparty's. So if you bought at 30 cents and won, you get your 30 cents back plus the counterparty's 70 cents. If you bought at 50 cents and won, you get your 50 cents back plus the other 50. The loser always receives nothing.
For short-dated contracts this works fine. Capital goes in, the event happens and capital is returned quickly; the maths make sense. For longer-dated contracts, the risk profile changes. Andy provided a valid practical example.
At the time of our conversation, the market was pricing Vice President JD Vance at roughly 10 per cent to become the next US president, with the 2028 election still around two and a half years away. If you are an institution that believes Vance has no credible path to the presidency and want to express that view, the capital requirements can work against you. To sell the contract, you must post 90 cents for every dollar of potential payout, because that is what is required to cover the losing side of a 10 per cent probability market. Your maximum gain on that position is 10 cents per contract with your capital tied up for two and a half years. Even accounting for the 3.25% APY that Kalshi pays on funds held in the account, the annualised return on that position comes out at roughly five and a half to six per cent, barely better than a money market fund, but with two and a half years of political event risk attached.
For an institution with competing uses for capital, locking up 90 cents per contract for two and a half years to earn what amounts to a modest fixed income return, with political event risk attached, may not be an attractive proposition. You might be completely right about Vance but the capital efficiency doesn't work.
"The return on capital is not sufficient for you to lock up the 90 cents. So it's a recognition of the market structure that we needed to get better, longer-dated pricing. You need more leverage into the market," Andy said.
On 29 May 2026, Kalshi launched the first-ever perpetual futures contracts (“Perps”) on an American regulated exchange, starting with Bitcoin. Kalshi CEO Tarek Mansour described the launch as the company's "evolution from prediction market leader to next-gen derivatives exchange." Unlike event contracts, perpetual futures do not expire and do not require full collateral to be locked up for the duration of a position. Instead, users select their own leverage level; at 5X, for example, a $1,000 position requires only $200 of posted margin, and a funding rate mechanism, adjusted three times per day, keeps the contract price tethered to the underlying spot market. Risk is ring-fenced at the position level through isolated margin, and the 3.25% APY that Kalshi pays on held funds applies to posted margin as well.
Further product categories are under regulatory review on a case-by-case basis, so we should expect more announcements in the months ahead.
Andy says that, "With the launch of perpetual futures inside a regulatory perimeter, Kalshi has enabled US users to trade one of the fastest growing products in the world for the first time."
So How Can Institutions Access Kalshi?
For institutions looking to put serious size on, there are three execution routes. The first is working the order book directly. The second is a request-for-quote mechanism that aggregates pricing from multiple counterparties to achieve best execution on large orders. The third is broker-intermediated block trading, where price is agreed bilaterally off-exchange and then submitted to the central clearing house, the same model that institutional fixed income and derivatives desks use every day.
For retail brokers in the LiquidityFinder community, practical access to prediction markets is available today. Trading technology provider Devexperts now offers a prediction markets solution through its DXtrade platform, allowing brokers to add event-based trading to their existing offering by routing client orders to regulated exchanges. dxFeed has also integrated Kalshi’s contracts into its market data feed for brokers.
For end clients, access is also growing through established brokerage infrastructure. In May 2026, Interactive Brokers launched a unified prediction markets interface giving clients direct access to Kalshi alongside CME Group and ForecastEx from a single account, with intelligent order routing to the venue offering the best net price. As Kalshi CEO Tarek Mansour said, “IBKR is the gold standard in the global financial broker industry. Its integration with Kalshi is a testament to the growing importance of prediction markets for sophisticated investors and financial institutions. We're just in the early innings of deep institutional adoption.”
One of the most significant distribution developments in Kalshi's institutional story is its partnership with Tradeweb, announced in February 2026. Tradeweb facilitates over $2.6 trillion in notional value per day across rates, credit, equities and money markets, and has integrated Kalshi's real-time event contract probabilities directly into its marketplace, reaching more than 3,000 institutional clients through infrastructure they already use every day. Tradeweb also made a minority equity investment in Kalshi as part of the arrangement. For rates and credit desks that want to overlay prediction market data on their existing workflows without building new connectivity, Tradeweb is the on-ramp. As Andy said, "Tradeweb just integrated Kalshi's markets directly into their platform. The institutional moment isn't coming, it's here and accelerating fast."
The presence of Jump Trading, Susquehanna International Group, Galaxy Digital and, most recently, Wintermute as publicly confirmed market makers on the exchange also adds significant institutional legitimacy. Wintermute, the London-based digital assets trading firm processing more than $3.5 trillion in annual trading volume, announced it is now streaming two-sided quotes across event contracts on Kalshi, joining a roster of liquidity providers that reads like a who's who of institutional markets.
The quality of the market data those liquidity providers are pricing against is worth understanding. Kalshi's crypto event contracts, for example, settle using a trade-weighted average price across three exchanges over a one-minute window, a methodology specifically designed to prevent price manipulation. "We set the gold standard in data management of the contracts and how they want to be set up," Andy explained. "The five years of experience that the team has here is one of the secret sauce elements." That design rigour is part of what the Chicago Federal Reserve was validating when it concluded Kalshi's market data outperforms consensus-based forecasting methods.
And there may be more to come. Citadel Securities has publicly acknowledged 'sound industrial logic' for a potential entry of its own, with Peng Zhao, CEO of Citadel Securities participating personally in Kalshi's $185 million Series C in June 2025. These are all signals that prediction markets have arrived as a serious institutional asset class.
Customising Markets For Customers
There is a version of Kalshi that most institutional participants have not yet discovered: a 'bespoke contract factory' that can design, list and execute a hedging instrument for a risk that does not exist anywhere else in the market - with rapid turnaround times.
A corporate client came to Kalshi with exposure to California solar energy tax credits. No hedging instrument existed for this risk anywhere in conventional markets. Kalshi designed the contract, listed it, priced it and executed a block trade, from start to finish, in under two weeks.
"If you have a risk currently, how do you hedge it? You have to find a specialist person who makes you a price to hedge that risk invisibly. What Kalshi allows you to do is see a market price on an exchange and trade a block size facing a central counterparty. That's a brilliant structure for managing specific idiosyncratic event risks," Andy says.
Susquehanna and Jump were on the liquidity-providing side of that trade. Two weeks, start to finish. Compare that to what it takes to get a new product listed and traded at a traditional exchange.
Kalshi lists thousands of products every week, taking product suggestions directly through its app and iterating in real time based on where participants want to trade. The contrast with the traditional exchange model, months of product design, an expensive launch campaign, and slow adoption, is stark. "The point is that if you have a risk currently, how do you hedge it?" Andy said. "What Kalshi allows you to do is see a market price on an exchange and trade a block size facing a central counterparty." That structure, applied to any verifiable outcome, is the core of the platform's commercial proposition.
For institutional firms with a specific hedging requirement, Andy's advice is to come directly to his team rather than going through the general product suggestion process in the app.
The UK and Europe Question
The question I know most of you are asking is simple: can my business trade on Kalshi?
If you are in the UK or Europe, the answer is: not directly, not yet, but there are routes in and the infrastructure is being built quickly.
Accessing Kalshi as a regulated institution in the UK or Europe currently requires working through a Futures Commission Merchant (FCM), the US equivalent of a clearing broker, typically structured through a US entity. That is not an insurmountable problem but it is an extra step that most UK and European prime brokers are not yet set up to handle.
The more fundamental issue is regulatory. The FCA's 2019 binary options ban, introduced after a wave of fraudulent platforms, many operating out of Israel, used binary-structured products to systematically defraud retail clients across Europe, and the potential jurisdiction of the Gambling Commission over certain contract types, create genuine uncertainty for UK-regulated firms. The problem is that Kalshi's event contracts, which are mostly binary in their payoff structure but regulated, transparent and exchange-traded, are currently caught in the same net.
The risk is that prediction markets follow the same path, with institutional flow finding its way to jurisdictions with clearer regulatory frameworks. For an institutional market that is growing at 800 per cent in six months, the cost of regulatory inaction will compound quickly.
The infrastructure picture is improving and the direction of travel is clearly toward greater institutional access. Clear Street joined as the first institutional FCM on Kalshi's exchange and clearing house in May 2026. Marex has built a clearing on-ramp for hedge fund clients. FIS has confirmed platform support through its back-office systems. More FCM relationships are expected before year end. (For UK and European institutions that want to understand what access might look like as the market develops, it would be best to contact Andy and the Kalshi institutional team.)
The Bottom Line
Kalshi means everything. The goal is to price any risk, for any participant, regardless of how niche, how bespoke or how far outside the scope of traditional derivatives markets it might sit.
Andy Ross clearly moved to Kalshi because he genuinely sees the opportunity in one of the most important shifts in institutional market structure in a generation. Event contracts that can be customised for specific market risks, in a solid regulatory framework, with institutional clearing and settlement are a financial markets dream-come-true. Add to that the first CFTC-approved perpetual futures on American soil and the picture becomes even more compelling. This is no longer just a prediction markets story. It is a derivatives exchange story, and the established players are keeping a watchful eye. The likes of CME and ICE, who have dominated institutional derivatives for decades, may find themselves under pressure to respond as Kalshi's product range expands and its institutional volumes grow. The momentum is clear, the regulatory foundation is solid, and the direction of travel is clear.
Jack Such from Kalshi's media team, who joined our call, had the last word, "Price any risk that affects you," he said. "Not enough people have understood that we can do that for them yet." That is the disruptive opportunity that Kalshi is building.
For anyone interested in market making, liquidity provision or bringing a specific hedging requirement to market, contact Andy and the institutional team at Kalshi here.
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