{"id":40886,"date":"2026-02-05T21:02:25","date_gmt":"2026-02-05T21:02:25","guid":{"rendered":"https:\/\/financialrush.com\/?p=40886"},"modified":"2026-02-05T21:02:25","modified_gmt":"2026-02-05T21:02:25","slug":"prediction-market-kalshi-seeks-us-approval-to-offer-margin-trades","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=40886","title":{"rendered":"Prediction market Kalshi seeks US approval to offer margin trades"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Simply sign up to the <!-- -->Financial &amp; markets regulation<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=e036870a-8335-4ba5-9262-1dd4f31907b0&amp;concept-id=baf2d326-7e13-4309-9f87-3eb1708468ff\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Prediction market operator Kalshi is seeking US regulatory approval to allow margin trading on its platform, as it seeks to lure institutional investors with sophisticated financial contracts.<\/p>\n<p><a href=\"https:\/\/www.ft.com\/stream\/33302bd9-7298-4c0d-8019-d86cb46cfff6\" title=\"\" data-trackable=\"link\">Kalshi<\/a> has held meetings with the Commodity Futures Trading Commission over several months in its effort to win approval, according to people familiar with the matter. It was not clear whether the CFTC would approve the request or where the matter stood.<\/p>\n<p>The initiative highlights the rapid evolution of prediction markets from their quaint origins offering wagers on Oscar winners and presidential elections into gambling behemoths <a href=\"https:\/\/www.ft.com\/content\/1bd5870e-9a8d-4845-91ef-0185dd55c807\" title=\"\" data-trackable=\"link\">spanning sports<\/a>, global affairs and financial markets. Allowing margin trading could pave the way for Kalshi to allow big investors to bet on certain contracts without putting up the full amount of funds, something many hedge funds consider a prerequisite before they will invest substantial capital on trades. <\/p>\n<p>If Kalshi gets approval, the platform would initially likely only offer margin contracts to institutional investors and not retail traders, according to one of the people.<strong><br \/><\/strong><br \/>Kalshi declined to comment. The CFTC did not respond to a request for comment.<\/p>\n<p>\u201cWhat we\u2019re seeing in 2026 is the CFTC and [Securities and Exchange Commission] saying there\u2019s not much of a difference between trading and gambling anymore,\u201d said Bill Singer, a former regulatory defence lawyer. \u201cWhen you have [exchange traded funds] offering triple leverage on all sorts of odd things, how do you justify extending margin to trade on a meme stock but not on a prediction market?\u201d<\/p>\n<p>Kalshi and its main rival Polymarket have surged in popularity since the US presidential election in 2024, with monthly trading volumes reaching billions of dollars. <\/p>\n<p>Yet hedge funds and other large investors have <a href=\"https:\/\/www.ft.com\/content\/4e1ae184-f7e0-4a9b-9d0b-299b37bbd738\" title=\"\" data-trackable=\"link\">largely stayed on the sidelines<\/a>. Traders at these firms often oversee hundreds of millions of dollars, which requires asset classes with more liquidity and financial flexibility, like the ability to use margin, to make it worth their while to trade or hedge their positions.<\/p>\n<p>This month, Kalshi hired a risk manager who previously worked at broker-dealer Velocity Clearing. On LinkedIn, he said his previous job had helped him \u201cbuild a strong foundation in margin and risk\u201d.<\/p>\n<p>CFTC-regulated crypto exchange Crypto.com last week launched its own prediction market platform that it said was the first to \u201coffer margin trading\u201d.<\/p>\n<p>In an apparent push to differentiate itself from rival prediction market Polymarket \u2014 which is based offshore and built on blockchain technology \u2014 Kalshi on Thursday said it had formed a new \u201cindependent\u00a0surveillance audit committee\u201d that would\u00a0publish quarterly public reports on\u00a0suspicious trades and details of its own investigations into potential market manipulation.<\/p>\n<p>The CFTC has adopted a light-touch regulatory approach to prediction markets under its new Trump-appointed chair, Michael Selig. Last week it officially withdrew Biden-era proposals to ban political and sports-related event contracts from registered exchanges.<\/p>\n<p>At the same time, he has said the commission will write new rules to govern prediction markets, coming after a series of bets in which traders appear to have profited from inside information. Selig said last month that the regulator would \u201ccontinue to support the responsible development of event contract markets.\u201d He added that it was \u201ctime for clear rules and a clear understanding that the CFTC supports lawful innovation in these markets\u201d.<\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title o3-type-body-highlight\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image js-teaser\" data-id=\"56304201-db2d-46e7-9113-7edfd6e39453\">\n<div class=\"o-teaser__image-container js-teaser-image-container\"><a href=\"https:\/\/www.ft.com\/content\/56304201-db2d-46e7-9113-7edfd6e39453\" data-trackable=\"image-link\" data-trackable-context-story-link=\"image-link\" tabindex=\"-1\" aria-hidden=\"true\"><\/p>\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2493\/1402\"><\/div>\n<p><\/a><\/div>\n<\/div>\n<\/aside>\n<p>In 2020, Kalshi became the first prediction markets exchange to gain regulatory approval to operate in the US. Four years later, the company received the greenlight from the CFTC to operate its own clearinghouse, although only for \u201cfully collateralised\u201d positions, meaning that investors were required to fully fund their trades. <\/p>\n<p>Introducing margin would be a pivotal moment for Kalshi in its endeavour to attract more traditional Wall Street firms, said Jake Preiserowicz, a partner at the law firm McDermott Will &amp; Schulte who advises hedge funds and previously worked at the CFTC.<\/p>\n<p>\u201cMargin is a central part of what hedge funds do right now,\u201d he said. \u201cIt\u2019s basically impossible to trade derivatives any other way when you\u2019re an institutional investor.\u201d<strong\/><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/e036870a-8335-4ba5-9262-1dd4f31907b0\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the Financial &amp; markets regulation myFT Digest &#8212; delivered&hellip;\n","protected":false},"author":5,"featured_media":40887,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-40886","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/40886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40886"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/40886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/40887"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}