DRW, Wintermute build prediction market desks as Polymarket volume hits billions

Chicago-based trading giant DRW has spent decades profiting from mismatches between different asset classes, and now it's building a dedicated prediction market desk targeting platforms such as Polymarket and Kalshi. The move is one of the clearest signs yet that sophisticated "quantitative trading" firms — traders that use complex math and analysis to set up strategies — are increasingly viewing prediction markets as a legitimate trading venue rather than a niche betting product.

The firm that has been a dominant force in derivatives, fixed income and crypto markets since 1992 recently posted a job listing requiring candidates to monitor prices in real time across both platforms simultaneously, identify gaps where one is mispricing an outcome relative to the other, and react quickly to profit before the pricing converges.

The strategies listed in these posts — including microstructure arbitrage, cross-platform arbitrage, and news-driven momentum trading at sub-second speeds — are techniques honed in crypto derivatives markets and now being applied to sports and political events. The trader's circle of life continues.

DRW is not alone. Wintermute, the algorithmic market maker that processes billions in daily crypto volume, is hiring algorithmic traders with experience in prediction markets. IMC, another proprietary trading firm, is also looking for quantitative traders comfortable operating across binary event contracts. Meanwhile, traditional crypto exchanges like OKX and Crypto.com have also recently posted job listings.

The hiring wave suggests institutional trading firms increasingly believe prediction markets have matured into a serious asset class and are ripe for profit.

Exploiting the mismatch

So what's driving the sudden push? The catalyst is the volume being traded on these platforms. Polymarket alone processed between $22 billion and $40 billion across political, economic and sports markets in 2025, up from virtually nothing three years ago, and a growing share of that is concentrated in sports. As of last week, Polymarket's market on the UEFA Champions League Winner has processed $256 million, the 2026 NBA Champion market has done $399 million, and the 2026 NHL Stanley Cup market sits at $79 million after wild swings that saw Carolina Hurricanes rise from sub-10% implied probability to around 50% as they emerged from the Eastern Conference. Combined, those three markets alone represent over $730 million in volume on sports outcomes, approaching the annual trading volume of some mid-sized European sports betting exchanges.

But the real reason traditional firms are pushing into this industry may not be to predict outcomes better than everyone else, market observers say. "I don't expect the institutional capital is contributing meaningfully to the accuracy of these markets, especially in the case of sports," said Harry Crane, a statistics professor at Rutgers University who studies prediction market calibration. "The accuracy of the markets is driven by specialized sports betting groups, which are much sharper at pricing sports outcomes."

Instead, Crane argues, firms such as DRW are likely applying trading techniques developed in traditional financial markets to exploit pricing mismatch. "To the extent they are profitable, the institutions are likely applying techniques on short-term market dynamics and other technical aspects of trading that capitalize on short-term market fluctuations without insight into the event outcome."

Simply put, DRW is not trying to predict who wins the Champions League. It is trying to profit from the way prices move before that question is answered.

A recent example appeared in the market for Britain's next prime minister. On the morning of May 14, Andy Burnham's odds of becoming the next U.K. leader in the "Next UK Prime Minister" market on Polymarket surged from 24 cents to 43 cents as political speculation intensified around a potential Labour leadership challenge. But Betfair, the London-based betting exchange with over a