FIS has announced that it has introduced a new cleared derivatives solution designed to support post-trade processing in regulated prediction markets, as activity in this segment continues to increase.
The product, called FIS CD Prediction Clearing, provides real-time clearing and 24-hour operational support, addressing limitations in existing systems that rely on batch processing and restricted operating hours. The solution is integrated into the company’s broader cleared derivatives platform.
The launch reflects growing interest in prediction markets, where participants trade contracts based on the outcome of future events, and highlights the need for infrastructure capable of handling continuous trading environments.
Why Are Prediction Markets Expanding?
Prediction markets have gained attention as platforms that allow participants to express views on future events through tradable contracts. These markets can cover a range of outcomes, including economic indicators, political events, and other measurable developments.
Recent estimates suggest that the sector could grow significantly over the coming years, driven by increasing participation from both retail and institutional users. As activity expands, infrastructure requirements become more complex, particularly in areas such as clearing and risk management.
Andy Ross, Head of Institutional at Kalshi, commented, “We are at an inflection point for prediction markets. The appetite from both retail and institutional participants is unlike anything we’ve seen before.”
The growth of these markets introduces operational challenges, including the need to process high volumes of transactions and manage risk in real time. Traditional systems, designed for periodic processing, may not meet these requirements.
How Does FIS CD Prediction Clearing Work?
The new solution replaces batch-based clearing processes with real-time transaction processing, allowing market participants to receive continuous updates on positions and risk exposure. This is particularly relevant in markets where contract values can change rapidly based on new information.
The platform supports high transaction volumes and provides continuous availability, enabling firms to operate without interruptions linked to traditional processing cycles. This aligns with the broader shift toward always-on trading environments.
Andrés Choussy, Head of Capital Markets at FIS, commented, “Prediction markets are demanding real-time clearing, high-volume transaction processing and round-the-clock availability, all of which are capabilities that legacy systems were never designed to deliver at scale.”
The system is built on a cloud-based architecture and integrates with existing cleared derivatives tools, including books and records management. This allows firms to incorporate prediction market activity into their existing workflows.
The solution is designed for futures commission merchants and other participants entering prediction markets, providing infrastructure that can scale with increasing activity.
What Does This Mean For Derivatives Infrastructure?
The introduction of dedicated clearing systems for prediction markets indicates that this segment is moving toward more formalized structures within the broader derivatives ecosystem. As markets grow, infrastructure must adapt to support new types of contracts and trading behavior.
Real-time clearing may improve transparency and risk management by providing immediate visibility into positions and exposures. This can reduce the potential for discrepancies between trading activity and settlement processes.
The move also reflects a broader trend in financial markets toward continuous operation. As trading expands beyond traditional hours, post-trade systems must support the same level of availability and responsiveness.
At the same time, the development raises questions about how prediction markets will be regulated and integrated into existing frameworks. As participation increases, oversight and compliance requirements may evolve to address the specific characteristics of these markets.
The launch by FIS suggests that infrastructure providers are preparing for increased activity in this segment, positioning their systems to support both current demand and potential future growth.
The effectiveness of these solutions will depend on adoption by market participants and how well they integrate with existing trading and risk management systems.
