Prediction market platform Kalshi has been approved to offer margin trading to professional clients, a move designed to make its platform more attractive to institutional investors.
The license granted to Kalshi’s affiliate Kinetic Markets allows it to operate as a futures commission dealer, according to a filing with the National Futures Association.
Before margin trading goes live, the company still needs a sign-off from the Commodity Futures Trading Commission (CFTC) for rule changes that will allow trading without full security up front.
Margin trading allows investors to open positions with less upfront capital, a practice common in traditional markets but new in regulated prediction markets. Competitors, which include crypto-native prediction markets like Polymarket, do not offer margin trading and instead operate with fully hedged positions.
Prediction markets let users bet on the outcomes of real-world events, from elections to the release of economic data. These have seen trading volume explode over the past few months while facing legal backlash from state regulators who claim some event contracts constitute unlicensed gambling.
Still, prediction markets have continued to grow. Earlier this month, Kalshi raised more than $1 billion in a funding round that valued the prediction market at $22 billion.
Meanwhile, Intercontinental Exchange, the owner of the New York Stock Exchange, doubled its investment in rival prediction market Polymarket, bringing its total commitment to nearly $2 billion.
Kalshi’s margin feature is set to debut for institutional clients only and may be rolled out first for new products rather than for core event contracts.
