Jeremy Maletz

Susquehanna’s prediction-markets business grew from macro work and election trading, while sports markets benefit from existing regulated markets and latent demand for a better product. Maletz says non-sports businesses are growing faster, but sports remains larger overall.

Institutional block trades can exceed visible screen liquidity: Maletz says a $50 million customer trade may not be constrained by the screen because Susquehanna can hold the position rather than immediately hedge it. He says the firm currently holds most OTC trade risk, while greater market liquidity could let it lay off more.

Maletz describes pricing unusual risks as an information-gathering exercise rather than simply balancing order flow: for an exposure without established research, such as goat risk, the firm consults informed people and its own researchers to establish a fair price. In a policy-coverage example, a buyer paid $50,000 for $500,000 of coverage, with the two sides putting up $50,000 and $450,000 and the winning side receiving $500,000 at resolution.

Maletz says clients can take on risk through exchange-traded prediction contracts, off-exchange swaps, or regulated insurance; exchange execution offers transparency and clearing, while swaps can sometimes receive more favorable capital treatment. Prediction-market positions require cash because portfolio margin is not yet available, making trades—especially long-dated ones—more expensive, whereas swap margin is negotiated and some swaps require no collateral.

For data-center moratorium exposure, Maletz describes swaps with a binary policy trigger and payouts linked to chip, compute, or power prices; a Texas governor-election contract can be a correlated but imperfect proxy. Hedge funds may combine election and moratorium contracts or use a bank-created basket, and existing Texas election exposure could lead the firm to quote a worse price on an additional moratorium position.