Prediction market platform Kalshi has been allowed to offer margin trading to professional clients, a move intended to make its platform more attractive to institutional investors.
The license, granted to Kinetic Markets, a subsidiary of Kalshi, allows it to operate as a commission trader of futures contracts, according to a deposit with the National Futures Association.
Before margin trading goes live, the company still needs approval from the Commodity Futures Trading Commission (CFTC) for rule changes that would allow trading without full collateral up front.
Margin trading allows investors to open positions with less initial capital, a common practice in traditional markets but new to regulated forecasting markets. Competitors, which include crypto-native prediction markets like Polymarket, do not offer margin trading and instead operate with fully collateralized positions.
Prediction markets allow users to bet on the outcomes of real-world events, ranging from elections to the release of economic data. These have seen trading volumes explode in recent months, while faced with a legal refusal state regulators who argue that some event contracts constitute unlicensed gambling.
Yet prediction markets have continued to grow. Earlier this month, Kalshi raised over a billion dollars in a funding round that valued the prediction market at $22 billion.
Meanwhile, the Intercontinental Exchange, owner of the New York Stock Exchange, has doubled its investment in rival prediction market Polymarket, bringing its total commitment to nearly $2 billion.
Kalshi’s margin functionality is expected to debut only for institutional clients and could be rolled out first for new products rather than core event contracts.
