Prediction market platform Polymarket is pushing to legally offer margin trading in the United States, a step that would allow users to bet on real-world events with less capital upfront and help the prediction market platform attract a more sophisticated class of traders.
According to a report by Bloomberg, the company filed an application to operate as a Futures Commission Merchant (FCM) through its affiliate, Coming Home GBA LLC, in a July 3 filing with the National Futures Association (NFA). A Polymarket representative confirmed the FCM application, while the CFTC and the NFA did not immediately respond to requests for comment.
An FCM license alone is not enough. Polymarket must also obtain approval from the Commodity Futures Trading Commission (CFTC) for changes to its exchange rulebook that would permit non-fully collateralized trading. At present, every position on Polymarket US, operated by QCX LLC, the CFTC-registered Designated Contract Market the company acquired in 2025, must be backed dollar for dollar.
Why Margin Trading Matters
Prediction market platforms such as Polymarket and Kalshi offer yes-or-no wagers on the outcomes of events ranging from elections and weather to sports and crypto prices. The contracts appeal to novice users because they are simpler than traditional financial derivatives such as futures traded on exchanges, including CME Group Inc.
Margin trading, by contrast, is a tactic frequently used by institutional investors. It allows traders to open positions without putting up the full amount of capital, making capital deployment across markets more efficient. Getting institutional investors on board is seen as a crucial next step for prediction market platforms, which have also drawn investment from traditional exchange operators, including a roughly $2 billion commitment from Intercontinental Exchange, the parent of the New York Stock Exchange.
Retail activity has already grown sharply. Weekly notional volume on Polymarket hit a record of more than $4 billion in June, making prediction markets one of the fastest-growing parts of finance.
Following Kalshi’s Path
Polymarket’s filing follows a path already taken by its main rival. Kalshi obtained its own FCM license earlier this year in a bid to expand client access to event bets at a larger scale, and the license is also part of the infrastructure needed to support perpetual futures. In May, the CFTC approved Kalshi’s BTCPERP Bitcoin perpetual contract, the first perpetual futures product listed on a US-regulated exchange, and the product went live in early June.
Perpetual futures are a type of derivative popular in crypto markets that, unlike traditional futures contracts, do not expire. Instead, the value of the contract remains tied to the underlying asset, creating a tradable instrument that tracks the current price of a commodity.
Kalshi racked up more than $5.5 billion of perpetuals trading volume within two weeks of the product’s official launch, with contracts primarily tied to crypto tokens, and is now in talks with the CFTC to extend perps into metals, forex, and energy.
The rollout has not been unchallenged. CME Group has moved to sue the CFTC over the Kalshi perps approval, arguing the products should be treated as swaps under the Dodd-Frank Act rather than futures.
Regulatory Heat in the Background
The FCM filing lands at a delicate moment for Polymarket. Bloomberg reported in late June that the CFTC is conducting a broad probe into the company, the first high-profile inquiry into an event contract platform under Chairman Michael Selig.
The investigation reportedly includes Polymarket’s social media activity after The Wall Street Journal reported the company had hired dozens of mostly college-aged content creators to film themselves making staged trades and fake wins to drive users to its site.
Insider trading has been another sore point for the industry. Polymarket uses a public blockchain ledger that makes it possible for anyone to see individual bets, though the associated accounts are generally pseudonymous.
While suspicious trades have long surfaced across financial markets, the traceability of unusually well-timed trades on Polymarket has drawn scrutiny from lawmakers and regulators over insider-trading risks in the prediction-market industry.
In a high-profile case earlier this year, an active US Army Special Forces soldier was charged after allegedly using classified information about the operation to capture Nicolas Maduro to turn roughly $33,000 in bets into more than $400,000 in profit on the platform.
Under US regulations, users accessing margin products on any prediction market platform would have to undergo additional identity checks, including providing employer information. Those requirements have become a hot-button issue as the platforms grapple with high-profile instances of insider trading.
Polymarket only returned to the US legally in December 2025, after acquiring QCX LLC and QC Clearing for about $112 million and receiving an Amended Order of Designation from the CFTC.
The company had been locked out of its home market since 2022, when it paid a $1.4 million penalty for operating an unregistered facility for trading commodity options contracts. Whether regulators now sign off on adding leverage to that comeback will be a defining test for the prediction market sector.
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