Clear Street Becomes First Institutional FCM on Kalshi, Opening Wall Street Access to Prediction Markets

On May 1, 2026, Clear Street — a cloud-native broker that serves hedge funds and sophisticated traders — officially became the first institutional Futures Commission Merchant (FCM) to join Kalshi's exchange and clearing house. The announcement, made via a joint GlobeNewswire press release, signals a structural shift in how prediction market event contracts reach institutional investors. This is not a data partnership or a media deal. It is the same plumbing Wall Street uses to access CME Group futures, now pointed at Kalshi's event contracts.

For traders and observers trying to understand where prediction markets are headed in the financial system, this partnership is worth dissecting carefully.

What Is Clear Street?

Clear Street describes itself as a cloud-native financial infrastructure firm with a mission to give every sophisticated investor access to every asset, in every market. It is best known as a broker and clearing provider to hedge funds and professional trading firms.

At the time of the May 1 announcement, Clear Street had a valuation of over $12 billion, according to Bloomberg. The firm's futures brokerage held $1.1 billion in customer assets at the end of February 2026, according to data from the Commodity Futures Trading Commission. Those are not large-scale retail numbers — that is institutional capital.

The firm is led by CEO Ed Tilly, with Andy Volz serving as Chief Commercial Officer and Jon Daplyn as Chief Operating Officer. Earlier in 2026, Clear Street had pursued an initial public offering that was ultimately pulled amid a broader selloff in brokerage stocks, according to Bloomberg.

Clear Street's technology architecture is built as a single platform — one ledger across every stage of the trade lifecycle — spanning equities, options, futures, fixed income, derivatives, and digital assets. The point of that architecture, as COO Daplyn explained in the announcement, is that adding a new asset class does not require rebuilding infrastructure from scratch. Prediction markets are now on that list.

What the Clear Street–Kalshi Partnership Actually Covers

The partnership announcement laid out five components of Clear Street's involvement on Kalshi's exchange:

1. Institutional trading access to Kalshi's 24/7 regulated event contracts. Clear Street's institutional client base — hedge funds and sophisticated traders — can now trade event contracts directly through the exchange.

2. Regulated clearing and settlement. Clear Street's FCM handles the margin, collateral, and settlement mechanics for institutional trades, meeting the operational standards institutions require.

3. Large-scale risk transfer through block trading. Kalshi completed its first institutional block trade in April 2026 — a carbon credit hedge structured through Greenlight Capital. Block trading allows institutions to move large positions without disrupting market prices in the open order book.

4. Swap solutions for ETF issuers. Clear Street launched a swap desk specifically to support ETF issuers that want to structure listed investment products around prediction markets. Several asset managers — including Roundhill, GraniteShares, and Bitwise — have active SEC/CFTC filings for prediction market ETFs, and the swap desk provides the underlying hedge exposure those structures need.

5. Infrastructure to scale liquidity. The partnership is designed to deepen the liquidity available on Kalshi's markets by routing institutional capital through regulated channels.

CCO Volz described the prediction market asset class as "emerging" and "fast-growing," and said Clear Street's institutional clients had explicitly asked for "clearing, risk management and swap product capabilities" in this space. Kalshi VP of Business Development Max Crowley said institutional demand had reached "a tipping point."

What Is an FCM, and Why Does It Matter for Prediction Markets?

If you trade futures or options at an institutional level, you almost certainly do it through a Futures Commission Merchant. An FCM is a CFTC-registered broker authorized to solicit and accept orders for futures, options on futures, and swaps, and to hold customer margin accounts to fund those positions. FCMs are the institutional layer between a client and an exchange like the CME Group or, now, Kalshi.

Kalshi operates as both a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO) — the exchange and the clearinghouse, respectively. The CFTC granted Kalshi its DCM designation in November 2020 and its DCO status subsequently. That two-part structure is why Kalshi can settle trades without relying on an external clearinghouse.

But exchanges do not typically trade directly with every institutional client. FCMs sit in the middle: they aggregate client orders, manage margin and collateral at scale, and maintain the regulated infrastructure that institutional risk management teams require. Without FCMs in place, institutional investors — operating under ERISA obligations, prime brokerage agreements, or fund mandates that require approved execution channels — cannot access the exchange even if they want to.

For context, retail users access Kalshi directly at kalshi.com or through partner platforms like Robinhood and Coinbase, which route orders to Kalshi's exchange through their own FCM relationships. Clear Street is different: it is specifically positioned to serve the institutional segment of the market — hedge funds, macro traders, and portfolio managers who trade in sizes and under compliance requirements that direct retail platforms are not built to handle.

The Swap Desk: Bridging Prediction Markets and the ETF Industry

The swap desk component of the Clear Street partnership deserves particular attention, because it ties directly to one of the most active developments in prediction market infrastructure right now.

Several asset managers have filed with regulators to launch ETFs that track prediction market outcomes. PredictionMarkets.US covered these filings in detail — firms like Roundhill Investments, GraniteShares, and Bitwise have submitted applications for products that would give retail investors exposure to event contracts through standard brokerage accounts, without requiring direct access to Kalshi's exchange.

To structure an ETF that reflects event contract prices, issuers need a counterparty that can provide synthetic exposure through a swap — essentially a contract that mirrors the economic performance of the underlying prediction market positions. Clear Street's new swap desk is designed to provide exactly that.

This matters because it creates a two-lane institutional access model: direct FCM trading for hedge funds and sophisticated accounts, and indirect ETF exposure for retail investors who want prediction market returns without setting up a Kalshi account. Both lanes are now in active development.

Part of a Broader Institutional Stack Being Built Around Kalshi

The Clear Street announcement is the latest in a sequence of institutional infrastructure moves:

• February 19, 2026: Tradeweb Markets (Nasdaq: TW) announced a strategic partnership with Kalshi and made a minority investment in the company. The deal aims to integrate Kalshi's event probabilities and market data directly into Tradeweb's rates and credit platforms, which serve more than 3,000 institutional clients globally. Tradeweb's goal is to eventually build the first institutional-focused portal for event contract trading.

• March 11, 2026: Bloomberg reported that Clear Street and Marex Group — a second institutional broker valued at approximately $2.6 billion — were both planning to open Kalshi access to institutional clients. Marex's global clearing head, Thomas Texier, told Bloomberg the demand was coming from large hedge funds approaching the firm directly.

• April 2026: Kalshi completed its first institutional block trade, a carbon credit hedge structured through Greenlight Capital. Block trading — used by institutional investors to move large positions without moving the market — is a prerequisite for serious institutional participation.

• May 1, 2026: Clear Street's FCM membership officially launches, along with the swap desk for ETF issuers.

Taken together, these moves represent an institutional rails build-out: data integration via Tradeweb, execution and clearing via FCMs like Clear Street and Marex, block trading infrastructure for large capital deployment, and an ETF pathway for broader distribution. The prediction market industry is assembling the same infrastructure stack that exists for other CFTC-regulated asset classes.

The Regulatory Asterisk That Institutional Investors Cannot Ignore

Institutional investors do not ignore regulatory risk. Clear Street's CEO Ed Tilly acknowledged as much in March 2026, telling Bloomberg that the firm was proceeding carefully given the ongoing regulatory uncertainty surrounding the prediction market industry.

That uncertainty is real. Several states have filed lawsuits challenging Kalshi's ability to offer sports event contracts without state gaming licenses. Federal courts have issued conflicting rulings at the district level. On April 6, 2026, the Third Circuit Court of Appeals ruled 2-1 in favor of Kalshi, affirming that federal law under the Commodity Exchange Act preempts state gambling regulations as applied to trading on a CFTC-registered DCM. That ruling is significant, but it applies to the Third Circuit (New Jersey), and appeals — including a potential petition to the U.S. Supreme Court — remain possible.

The Ninth Circuit held oral arguments in April 2026 in consolidated cases involving Kalshi, Robinhood, and Crypto.com. A divergent ruling from the Ninth Circuit would create a circuit split and accelerate the path to Supreme Court review.

Kalshi is valued at $22 billion, according to Reuters reporting on March 19, 2026, citing a funding round led by Coatue Management. That valuation reflects investor belief that the federal-regulatory pathway holds — but it also prices in the possibility that it does not entirely.

For institutional investors accessing Kalshi through Clear Street, the calculus is similar. The FCM structure provides regulated institutional access today. The long-term question of whether sports event contracts survive the full state-litigation gauntlet remains open.

Frequently Asked Questions

What is a Futures Commission Merchant (FCM)? An FCM is a CFTC-registered firm that solicits or accepts orders for futures, swaps, and options contracts and holds customer funds to support those positions. FCMs are the institutional broker layer between clients and CFTC-regulated exchanges like Kalshi, CME Group, or the Intercontinental Exchange.

Does the Clear Street partnership change how retail users access Kalshi? No. Retail users continue to access Kalshi directly through the Kalshi app and website, or through consumer platforms like Robinhood and Coinbase that route through their own FCM arrangements. Clear Street serves institutional clients — hedge funds and professional trading firms. The two channels operate separately.

What is the Clear Street swap desk, and why does it matter? The swap desk allows ETF issuers to gain synthetic exposure to Kalshi's event contracts through over-the-counter swap agreements, rather than trading directly on the exchange. This enables the construction of prediction market ETF products — regulated funds that retail investors can access through standard brokerage accounts — without requiring those funds to hold event contracts directly.

Is Marex also joining Kalshi? Bloomberg reported in March 2026 that Marex Group, a second institutional broker, was also planning to offer institutional clients access to Kalshi's exchange. Marex's global clearing head stated that demand was coming from large hedge funds approaching the firm directly. No official launch announcement from Marex had been made as of the date of this article.

What is Tradeweb's role with Kalshi? Tradeweb (Nasdaq: TW) is a major electronic marketplace for institutional rates, credit, and fixed-income products. In February 2026, Tradeweb made a minority investment in Kalshi and announced a partnership to integrate Kalshi event data into Tradeweb's institutional trading platforms, with an eventual goal of building the first institutional portal for event contract trading.

What This Means for Prediction Markets Long-Term

Clear Street's FCM membership on Kalshi is not a retail story. It is a market structure story. When the same institutional plumbing that connects hedge funds to CME Group futures connects them to prediction market event contracts, the asset class has moved from novelty to infrastructure.

The swap desk for ETF issuers extends that logic further: the same ETF wrapper that gives retail investors exposure to equity indices or commodity prices can now — in principle — give them exposure to prediction market outcomes. That structural continuity matters.

The open question is not whether institutional investors want access to prediction markets. The Clear Street partnership, the Marex plans, the Tradeweb minority investment, and the three active block trades on Kalshi's exchange all suggest they do. The open question is whether the regulatory environment fully stabilizes at the federal level before state-level litigation produces a patchwork of restrictions that limits how broadly those instruments can be offered.

Prediction markets as an institutional asset class are being built regardless. Explore live market data across Kalshi and other US-regulated platforms at PredictionMarkets.US.

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Sources & Verification

• Clear Street & Kalshi Partnership GlobeNewswire Press Release, May 1, 2026
• Bloomberg: "Clear Street Signs Up to Kalshi in Prediction Markets Push," Bernard Goyder and Emily Nicolle, May 1, 2026
• Bloomberg: "Prime Brokers Race to Give Wall Street Access to Event Bets," March 11, 2026
• Tradeweb + Kalshi Strategic Partnership Press Release, tradeweb.com, February 19, 2026
• Reuters: "Kalshi valued at $22 billion in latest funding round, WSJ reports," March 19, 2026
• CFTC Designated Contract Markets Registry
• Clear Street company overview, clearstreet.io