Key Takeaways
- Polymarket has applied for a US license to offer margin trading on its prediction market platform.
- The platform still needs CFTC approval to amend its rulebook before it can legally launch non-full collateralized prediction market contracts.
- The move intensifies competition with Kalshi, which secured its own FCM license earlier this year and has already established a regulated brokerage framework.
Polymarket is taking another step toward expanding its regulated presence in the US by seeking approval to offer margin trading on its prediction market platform.
The company has applied for a Futures Commission Merchant (FCM) license through its affiliate, Coming Home GBA LLC, a move that could allow eligible users to trade event contracts using leverage rather than fully collateralizing every position.
If approved, the license would place Polymarket on a regulatory footing similar to that of rival Kalshi, which obtained an FCM license earlier this year.
However, the prediction market operator must also obtain approval from the Commodity Futures Trading Commission (CFTC) before introducing margined contracts, making the regulator’s next decision critical to the platform’s US expansion strategy.
Polymarket Files for a Futures Commission Merchant License
According to Bloomberg, Polymarket submitted its application for an FCM license on July 3 through Coming Home GBA LLC, with the filing appearing in records maintained by the National Futures Association (NFA).
A Futures Commission Merchant acts as an intermediary between customers and derivatives markets, handling client funds, margin requirements, and trade execution.
Obtaining the license would allow Polymarket to perform many of the same functions as traditional futures brokers, bringing its platform closer to established financial market infrastructure.
The application represents another milestone in Polymarket’s efforts to strengthen its regulatory standing in the US following its push to re-enter the market through licensed entities.
However, the FCM registration alone is not enough to launch leveraged prediction markets.
Before offering margin trading, Polymarket must also obtain CFTC approval to amend its rulebook to allow contracts that are not fully collateralized.
Under current US regulations, users trading margined prediction contracts would also face enhanced identity verification requirements, including the provision of additional personal information, such as employer details.
The dual approval process highlights the increasingly regulated environment surrounding prediction markets as they move further into mainstream finance.
Why Margin Trading Matters for Prediction Markets
Margin trading allows investors to open larger positions by depositing only a portion of the capital required to support the trade.
Instead of paying the full value of a contract upfront, traders borrow the remaining amount, increasing both potential returns and potential losses.
The model is widely used across traditional futures and derivatives markets because it improves capital efficiency and enables professional traders to deploy funds across multiple positions simultaneously.
For Polymarket, introducing margin trading could make the platform more attractive to institutional investors and sophisticated traders already familiar with leveraged derivatives.
The structure would also require Polymarket to manage customer funds and margin requirements in a manner similar to established futures brokers, bringing its operations closer to those of traditional financial institutions.
The move reflects a broader trend in the prediction market industry, where operators are increasingly seeking to position event contracts as regulated financial products rather than gambling instruments.
Competition With Kalshi Intensifies
Polymarket’s regulatory push comes as competition with Kalshi continues to heat up.
Earlier this year, Kalshi secured its own Futures Commission Merchant license through affiliate Kinetic Markets LLC, giving it a head start in building a regulated brokerage infrastructure for prediction markets.
If the CFTC ultimately approves Polymarket’s proposed rule changes, the company would be able to compete more directly by offering leveraged event contracts to eligible US users.
The application also arrives as prediction markets continue to gain traction among retail and institutional traders alike, with platforms expanding beyond politics into sports, macroeconomic data, cryptocurrencies, and corporate events.
Still, regulatory scrutiny remains one of the industry’s defining challenges.
Federal regulators continue to examine how prediction markets fit within existing derivatives laws, while several states have questioned whether certain event contracts resemble sports betting rather than financial products.
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The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
