Kalshi is seeking permission from the CFTC, which oversees event contracts, to let traders use leverage on prediction markets/). The application was submitted by Kalshi Klear, the firm's internal clearing house, and is part of a broader push by prediction markets to draw bigger, institutional pools of capital.
Margin trading lets someone borrow against their position to put on more size than their cash alone would allow. That is standard practice in stocks and futures on Wall Street, and on the platform, the firm's perpetual futures already come with margin access. Kalshi said in a memo to CNBC that leverage could make longer-dated markets more compelling for institutions, and it is proposing higher capital requirements as contracts get closer to expiration. If marginable contracts are approved, access would be restricted to self-clearing members with direct relationships to Kalshi Klear who meet specified capital thresholds.
Institutions eyeing prediction markets have generally viewed margin as a must-have to participate at scale, given their comfort with it in traditional equities and derivatives. For now, every event contract on regulated U.S. exchanges is fully collateralized. Bloomberg News reported in July that Polymarket, a rival, has taken steps to obtain regulatory licenses that could pave the way to margin trading for U.S. event contracts.
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Prediction market activity has jumped over the past year, including on Kalshi, largely on the back of retail trading in sports markets. According to a Kalshi representative speaking to CNBC, the firm will not extend margin to sports event contracts or to its culture and "mention" markets. The firm also plans a system that tightens leverage as expirations approach, and says only qualified self-clearing members could use margin if regulators sign off.
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