Polymarket Seeks US License For Margin Trading
David Genge Published 27/07/2026
Prediction market site Polymarket has applied to the Commodities Futures Trading Commission (CFTC) seeking a license to offer margin trading in the US. The regulatory change would require that Polymarket be granted a filing for a Futures Commission Merchant license. The prediction market company is aiming to attract institutional capital.
The application was filed with the National Futures Association by Polymarket through its affiliate, Coming Home GBA LLC. It will require clearance from the CFTC to amend its rulebooks for non-fully collateralized trading. Polymarket would be seeking to keep pace with rival company Kalshi, which secured its own Futures Commission Merchant clearance earlier in the year.
What would this change mean for Polymarket?
The main reason for Polymarket to want to implement this change is to offer more types of trades to its customers. A Futures Commission Merchant (FCM) serves as a go-between between customers and derivatives markets. The FCM handles client funds, margin requirements, and trade execution.
By acquiring a license to perform margin trades, it would allow Polymarket to undertake many of the same functions as traditional futures brokers. The move would also enable the Polymarket platform to operate much more like the infrastructure of an established financial market.
The application could serve to further strengthen Polymarket's regulatory status in the US market. The company would also be keeping pace with arch-rival Kalshi. That prediction market site gained its FCM license earlier this year.
Polymarket needs a rulebook change to make this move happen
Acquiring an FCM license is just one step in the process toward being allowed to offer margin trading as a leveraged prediction market. The key element that must be initiated by the CFTC is to amend Polymarket's operating rulebook. Without CFTC approval to offer contracts that are not fully collateralized, Polymarket cannot move forward with this plan.
Other requirements must also be put into place by a site before it can offer margined prediction contracts. By seeking to make the move into more mainstream financial markets, prediction market sites will be required to be much more vigilant about their customers than an online sports betting site.
Sites that are trading margined prediction contracts must ramp up their security levels, as well as that of their customers. One mandatory requirement under US regulatory policy is enhanced identity verification. It would be necessary for customers to supply a much higher level of personal information to be approved for margin trading. It would even include supplying details about their employer.
Why do prediction market sites want to offer margin trading
Margin trading is different from standard prediction market plays, or betting on a sporting event. It is best classified as an investment strategy.
With margin trading, you are utilizing a small deposit to engineer a large trade. It's like buying on credit. You are basically committing to borrow money from a broker to buy more assets. This maneuver can amplify both potential profits and potential losses.
The margin trading model is widely used in traditional futures and derivatives markets because it improves capital efficiency. It enables traders to place funds across a variety of positions at the same time.
Prediction market sites like Polymarket see margin trading as a method of moving into more sophisticated and lucrative areas of leveraged derivatives.
For Polymarket, introducing margin trading could make the platform more attractive to institutional investors. It could encourage sophisticated traders already familiar with leveraged derivatives to use their site. It would also allow the emerging prediction market sites to expand their scope from what are basically instruments of gambling into more standard and regulated financial markets.