Kalshi Inc. has secured a licence that clears the way for users of the event prediction platform to make leveraged bets that don't require more than a partial deposit of funds.
The company received approval to operate a futures commission merchant through affiliate Kinetic Markets LLC, according to a 24 Mar filing with the National Futures Association, a self-regulatory body in the US.
The arrival of so-called 'margin trading' is still some way off. Kalshi must still obtain Commodity Futures Trading Commission (CFTC) approval for rulebook changes to enable non-fully collateralized trading.
Chief executive Tarek Mansour suggested that a margin trading product would soon help institutional investors use the Kalshi platform in a more efficient way, in terms of the cost of capital. Mansour made the remarks during a Bloomberg News panel.
Adding a margin component would allow users to open positions without posting the full amount of capital, a feature already common in traditional futures and options markets. Brokers serving hedge funds and other large investors have begun the process of opening client access to Kalshi event contracts.
The move comes as prediction markets have become one of the fastest-growing segments of finance, with Kalshi recording more than $3bn in weekly notional volume earlier this month, according to Bloomberg.
While Kalshi does not expect to launch margin on event contracts immediately, it could roll it out sooner for other products in its pipeline. The feature will initially be available only to institutional financial firms.
Kalshi’s valuation has surged to $22bn following a recent funding round led by tech-focused investment firm Coatue. Institutional involvement is viewed as the crucial next phase of development for prediction markets.
