By Nick Devor
Prediction-market traders are getting into commodities as the war in the Middle East roils oil markets and global supply shocks keep grocery prices volatile. To meet the moment, leading U.S. prediction market Kalshi is adding new markets for commodities like natural gas and wheat.
Its pre-existing contract for the price of West Texas Intermediate oil saw a surge in trading volume in March, becoming one of the fastest-growing markets in Kalshi's history, the firm tells Barron's. That oil trading boom and conversations with new institutional partners prompted an expansion of its commodities offerings, says Catherine Sullivan, Kalshi's head of product.
The new markets will be rolled out on Wednesday, and include metals like nickel as well as agricultural commodities such as corn, coffee, and cocoa.
"All of us are going through this insane geopolitical time," Sullivan says. "Everything that's happening in the Middle East. I'm seeing prices rise at the supermarket. And of course we have this constant thread of AI data-centers being built."
With new event contracts tied to commodities like Brent crude oil, sugar, and lithium, Kalshi is trying to provide ways to trade on each of those narratives.
However, adoption of prediction markets at the highest level of commodities trading may be limited, according to Robert Yawger, an executive director and commodity specialist at Mizuho.
"We have a very strong roster of customers. They are not going to be going into prediction markets," he says. "There are going to be a lot of people that are trading in prediction markets that we would not greenlight to trade with us."
While increased retail trading in the new markets will create fresh signals that some may incorporate into their trading strategies, "I don't believe it will really affect the hedge fund trader," Yawger says. "Those guys, to a large degree, already have that information at their disposal through the implied volatility in the options market."
To non-commodity institutional traders, the data generated by Kalshi's commodity prediction markets could prove useful without heavyweights like Mizuho in the mix, says Izzy Conlin, head of global markets strategy for Tradeweb.
"Even if the volume number of that event contract is low because it's retail trading, over a certain threshold it actually becomes very, very accurate and something that a large institution would want to use in their models," Conlin says.
Tradeweb -- which operates a trading platform for rates, credit, and money markets -- recently announced a partnership with Kalshi, as well as a minority stake in the prediction-market platform. The firm curates and repackages data from Kalshi markets into digestible readouts for Tradeweb's institutional users.
Prediction markets have a way to go before financial institutions begin trading on them, Conlin says. To trade on a prediction market, "you have to put up all of the cash up front to be able to trade and leave it for a certain period of time. That isn't how institutions are used to trading products -- especially derivative products."
Barron's has reported that JPMorgan Chase has no plans to start trading on prediction markets, although its trading desk monitors prediction market forecasts.
The data that prediction markets generate can serve as a sort of foot in the door. Once institutional firms get used to the format of the markets, they may become more comfortable trading on them -- and Kalshi recently received a license from the National Futures Association to open up margin trading.
At least some institutional players are planning to use Kalshi's new commodity markets. The firm tells Barron's that its new commodity contracts are among the first developed in collaboration with partners such as Jump Trading, which took a stake in Kalshi in February in exchange for providing liquidity on the platform.
Following the rollout of these new markets, Kalshi's partners are particularly interested in contracts tied to commodity price ranges, Kalshi's Sullivan says, and markets around freight shipments are next on the list. "There's constantly this back and forth with our traders around where the demand is, and then we try and flex to meet that," she says.
Write to Nick Devor at nicholas.devor@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 15, 2026 09:00 ET (13:00 GMT)
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