Prediction market platform Kalshi has been cleared to offer margin trading to professional clients, a move designed to make its platform more attractive to institutional investors.
The license, granted to Kalshi subsidiary Kinetic Markets, allows it to operate as a futures commission trader, according to a filing 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 upfront collateral.
Margin trading allows investors to open positions with less initial capital, a common practice in traditional markets but new in regulated prediction markets. Competitors, including crypto-native prediction markets like Polymarket, do not offer margin trading and instead trade with fully collateralized positions.
Prediction markets allow users to bet on the outcomes of real-world events, from elections to the release of economic data. They have seen trading volumes soar in recent months, while facing legal pushback from state regulators who argue that 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, which owns 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 will debut only for institutional clients and could be rolled out first for new products instead of main event contracts.
