Polymarket wants to bring margin trading on events, pushing prediction markets closer to the way institutional traders use derivatives.
One of the largest prediction market exchanges, Polymarket, is seeking regulatory approval to offer margin trading in the U.S., Bloomberg reports, citing a filing with the National Futures Association.
The company filed an application to operate as a futures commission merchant through its affiliate, Coming Home GBA LLC, per the report.
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A futures commission merchant license would be part of the infrastructure Polymarket needs to let users place trading bets without fully backing every position with cash upfront. Still, the company would also need approval from the CFTC to change its rulebook and allow non-fully collateralized trading, Bloomberg notes.
Margin Trading Changes the Product
The idea is that margin trading on Polymarket would push it toward a more institutional style of trading.
So instead of putting up the full amount for a position, bettors would be able to open bets with less capital upfront, making the product more capital-efficient, though it would also add more risk because losses can build faster when trades are leveraged.
When and if Polymarket gets regulatory approval, it would also put the company closer to Kalshi, its main U.S. rival.
Kalshi received its own futures commission merchant license earlier this year, allowing it to expand access to event contracts and support more complex products, including perpetual futures.
It has also launched crypto-linked perps and recorded more than $5.5 billion in trading volume within two weeks of the product’s official launch.
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