By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
The panel expresses concern about the sustainability of Kalshi's high-variance event contracts, with tail risks and potential liquidity issues posing significant challenges. The migration of Robinhood's volume to Rothera and Susquehanna's substantial loss highlight these risks.
Risk: Thin liquidity and high-variance events becoming easier to arbitrage away, potentially leading to margin erosion and reduced profitability for both takers and market makers.
Opportunity: None explicitly stated by the panel.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
The New York Knicks pulled off the largest comeback in NBA Finals history Wednesday, and retail traders on Kalshi turned that miracle into roughly $22 million, most of it taken off Susquehanna International Group.
Market makers lost $22.4 million before fees on the game, while “takers,” mostly retail accounts, booked that $22.4 million in profit before fees and $20.6 million after.
Susquehanna, believed to be the largest market maker on Kalshi, reportedly absorbed the bulk of it, in what a source called its worst sports day on record.
The damage came almost entirely on the game-winner market.
Don't Miss:
The Knicks traded near 5% while trailing by 29 points in the third quarter, and stayed under 10% for more than 80 minutes of real time, so makers kept selling cheap contracts on a team that would storm back to win 107-106.
With the Spurs up 106-105 and 11 seconds left, De’Aaron Fox attacked the rim instead of running out the clock, the kind of human mistake it’s difficult for algorithms to price in. OG Anunoby blocked the layup, then won it with a tip-in in the final seconds.
The Spurs scored just 16 fourth-quarter points, and Victor Wembanyama missed two late free throws that would have made Fox’s error immaterial.
“I won’t confirm the exact loss, but it was a tough day,” Jeff Yass, the Susquehanna co-founder and a self-described former Knicks fan, told InGame. “I grew up a Knicks fan but at this size, I was conflicted.”
Trending: Avoid the #1 Investing Mistake: How Your ‘Safe' Holdings Could Be Costing You Big Time
The comeback helped drive Kalshi to its biggest day ever, with $872 million traded, narrowly beating Super Bowl Sunday. The surge extends Kalshi’s run as the U.S. market leader, with May volume up over 2,500% on the year, valued at $22 billion in its latest round.
The game-winner contract alone saw $171.6 million change hands, ranking among the ten most-traded markets in Kalshi’s history and generating $2.3 million in fees.
Susquehanna, the desk that absorbed Wednesday’s loss, also makes markets on Rothera, a new, separate CFTC-licensed exchange that Robinhood Markets and Susquehanna invested in last year. Robinhood now routes some event contracts there instead of Kalshi.
Robinhood once accounted for nearly 60% of Kalshi’s volume, reportedly down to about 20% by April. As it shifts World Cup and baseball contracts to Rothera, the retail flow behind nights like Wednesday is volume Kalshi may stop seeing.
Image: IMAGN
**Read Next: **
Building Wealth Across More Than Just the Market
Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry.
Arrived
Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.
Immersed
Immersed is building technology for the future of work through spatial computing. Known for its AR/VR productivity platform that enables users to work across multiple virtual screens, the company has grown to more than 1.5 million users worldwide. Immersed is also developing Visor, a lightweight headset designed specifically for professional productivity, positioning the company at the intersection of remote work, extended reality (XR), and next-generation computing.
Vinovest
Fine wine and rare whiskey have historically moved independently of the stock market, making them a compelling alternative asset. Vinovest manages authenticated, insured portfolios of investment-grade wine and whiskey starting at $5,000 — sourcing, storage, and insurance all handled for you.
EnergyX
EnergyX is a clean energy technology company focused on direct lithium extraction and refinery technologies for the lithium-ion battery supply chain. Its proprietary DLE systems are designed to recover lithium from brine resources more efficiently and with less environmental impact, supporting efforts to expand lithium supply for electric vehicles, grid-scale storage, and other battery applications.
FarmTogether
Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000 — fully managed, with no landlord headaches.
EquityMultiple
For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000, with only ~5% of opportunities passing their due diligence process.
Fundrise
Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estate and credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth.
American Hartford Gold
American Hartford Gold is a precious metals dealer that helps clients buy physical gold and silver coins and bars, either for direct delivery or within self-directed precious metals IRAs. The company's services include gold and silver IRAs, IRA rollovers, and home delivery of bullion, giving investors a way to use tangible metals to diversify portfolios and seek protection against inflation and market volatility.
Mode Mobile
Mode Mobile is changing the way people interact with their phones by letting users earn money from the same apps and activities they already use every day. Instead of platforms keeping all the advertising revenue, Mode Mobile shares a portion back with users who engage with content, play games, and scroll on their devices. Named one of Deloitte's fastest-growing software companies in North America, the company has built a large beta user base and is scaling a model that turns everyday smartphone usage into a potential income stream.
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Four leading AI models discuss this article
"Kalshi's headline volume surge masks rising liquidity risk as makers absorb outsized losses while Robinhood diverts flow elsewhere."
The Knicks' 29-point comeback produced Kalshi's record $872M session and $171M on the game-winner alone, but the $22.4M market-maker loss, mostly absorbed by Susquehanna, highlights tail-risk exposure that algorithms struggle to price. Human errors like De'Aaron Fox's late attack and Wembanyama's missed free throws created the payout. With Robinhood already routing volume to rival Rothera, sustained maker participation may decline if similar outliers recur, tightening spreads or shrinking depth on high-variance contracts.
One anomalous game does not change the structural growth trajectory; May volume already up 2,500% shows retail demand can attract new makers even after a single bad day.
"Sustainable profitability in retail event contracts is unlikely; margins will compress as liquidity and participation grow."
The piece highlights a dramatic, one-off swing in a niche, highly leveraged market: event contracts on Kalshi. While entertaining, this reads like a sensational narrative about retail winning a lottery, not durable alpha. Sustainability hinges on liquidity, hedging, and the platform’s ability to keep pricing accurate as volumes shift (e.g., Robinhood routing to Rothera). If the edge rests on a few mega-contracts during exceptional games, that edge will erode as participation grows and spreads tighten. The real risk is structural: fees, thin liquidity, and potential regulatory or platform changes could erode profitability for both takers and market makers over time.
This could be a cherry-picked, one-off event; Susquehanna’s losses may be offset across other books, and as more players join, pricing will normalize, shrinking the edge for retail traders.
"The migration of retail volume from Kalshi to competitors like Rothera, combined with the extreme volatility of event-based market making, threatens the long-term viability of Kalshi's liquidity model."
The $22M retail windfall on Kalshi is a classic 'tail risk' event that highlights the fragility of automated market making in event-based prediction markets. While the headline celebrates retail victory, the real story is the structural shift in liquidity. Susquehanna’s massive loss isn't just a bad day; it’s a signal that algorithmic models struggle with high-variance, low-probability human errors—like a missed free throw or a bad coaching decision. With Robinhood actively migrating volume to the rival Rothera exchange, Kalshi is facing a liquidity drain that could make future 'miracle' events even more volatile for remaining participants. This isn't a sustainable growth story; it's a warning about the thin margins of event-based betting.
One could argue that this volatility is actually a feature, not a bug, as it attracts more speculative volume and proves that retail traders can successfully arbitrage institutional pricing errors.
"Kalshi's $22B valuation depends on sustained retail participation, but Robinhood's shift to Rothera and predictable market-maker losses on tail events create a structural headwind that one record day obscures."
This reads as a Kalshi victory lap, but the real story is structural decay. Yes, $872M volume is impressive, but Robinhood's migration from 60% to 20% of Kalshi's flow is a slow-motion exodus. Susquehanna's $22M loss on ONE game is material enough to reprrice their market-making appetite—they now have Rothera as an alternative venue. The article celebrates retail winning, but ignores that predictable losses on tail events (29-point comebacks, last-second blocks) will eventually compress odds so tight that retail participation dries up. Kalshi's $22B valuation assumes sustained retail engagement; one catastrophic loss per quarter could flip that math.
Kalshi just posted its biggest day ever and May volume is up 2,500% YoY—this is early-stage hypergrowth, not decay. One bad day for Susquehanna doesn't mean market makers will abandon the venue; it means they'll recalibrate pricing, which is exactly how efficient markets work.
"Robinhood's partial migration hasn't halted Kalshi's volume surge, implying makers may adapt rather than abandon the platform."
Claude treats Susquehanna's one-game loss as likely to flip Kalshi's valuation math, yet the 2500% YoY volume surge occurred alongside Robinhood already cutting its share from 60% to 20%. This suggests replacement makers can absorb flow even after visible tail losses. The unexamined risk is whether Rothera offers materially better pricing terms on high-variance contracts; if so, the next outlier game could accelerate institutional migration beyond what current growth offsets.
"Edge erosion from scaling and cross-venue competition, not Susquehanna's loss, is the key risk to Kalshi's margin profile on high-variance events."
Claude’s focus on Susquehanna’s $22M loss as a brake on Kalshi valuation ignores the structural liquidity evolution: replacement makers (Rothera) and cross-venue competition may actually deepen, not shrink, depth as volume scales. The real risk is model and pricing risk in high-variance events becoming easier to arbitrage away, not an inevitability of retail wins. If the edge rests on rare outliers, scaling may erode margins faster than headline volume grows.
"Institutional migration to Rothera is driven by structural venue advantages rather than just pricing models, threatening Kalshi's long-term liquidity."
Claude and Grok are missing the regulatory arbitrage here. Susquehanna isn't just 'recalibrating'—they are managing capital efficiency across venues. If Rothera offers lower capital requirements or more favorable maker-rebates, the $22M loss is merely the catalyst for an exodus, not a pricing lesson. The real risk isn't retail winning; it's that Kalshi’s market-making ecosystem is becoming a loss-leader for institutional players who have already found a more efficient venue to capture that same flow.
"The exodus thesis hinges on unverified assumptions about Rothera's competitive terms—without those specifics, we're confusing correlation (Robinhood's shift) with causation (maker defection)."
Gemini flags regulatory arbitrage and capital efficiency—that's the overlooked lever. But none of us have verified whether Rothera actually offers materially better maker terms or lower capital requirements. We're inferring institutional migration from Robinhood's flow shift, not from disclosed venue economics. That's a critical gap. If Rothera's terms are marginally better, Susquehanna's $22M loss accelerates exodus; if they're identical, it's just rebalancing. We need specifics on rebate structures and capital requirements before claiming structural decay.
The panel expresses concern about the sustainability of Kalshi's high-variance event contracts, with tail risks and potential liquidity issues posing significant challenges. The migration of Robinhood's volume to Rothera and Susquehanna's substantial loss highlight these risks.
None explicitly stated by the panel.
Thin liquidity and high-variance events becoming easier to arbitrage away, potentially leading to margin erosion and reduced profitability for both takers and market makers.