Update, 5 September 2026. Since this was published, leverage stopped being a forecast and became a product. Kalshi’s perps went live in June with per-asset caps under 6x, and Polymarket launched its own on 4 September at up to 20x across 67 markets. One thing here I got wrong: I expected regulators to recoil, and the CFTC approved the contract instead. The full update is in Prediction Market Perps Are Here. Everything below is preserved as published.
The industry is putting on a suit. Over the past few months the big prediction markets have been collecting the kind of licenses and products that make them look less like a novelty and more like a real exchange: margin trading, futures-broker registrations, even leveraged perpetual contracts. The story everyone’s telling is that prediction markets are finally growing up.
Maybe. But leverage is the riskiest thing that has happened to retail traders in prediction markets, and it’s arriving wrapped in the language of maturity.
What’s actually happening
In late March 2026, Kalshi became the first major prediction market to win clearance to offer margin through an NFA-registered affiliate set up as a futures commission merchant and swap firm. That gave it an early lead in leveraged event trading for US users.
Polymarket is now chasing the same thing. On July 3 it filed its own paperwork with the National Futures Association to register a futures-broker affiliate, though it still needs the CFTC to sign off on rulebook changes before it can let users hold positions without posting the full contract value. Alongside that, Polymarket has rolled out perpetual futures with advertised leverage of at least ten times a user’s stablecoin balance, and Kalshi has reportedly been eyeing crypto and perps of its own.
Strip the jargon and it comes down to one change: margin lets you back a position while putting up only a fraction of the money. You control a bigger bet with less cash.
Two things are being called the same word
Before going further, here’s a distinction the coverage keeps collapsing, and it matters more than anything else here.
Margin on an event contract is the tamer version. The contract still settles at a dollar or nothing, on a date everyone can see. You’ve borrowed to hold a position whose maximum value is known in advance. Risky, but the shape of the risk is legible.
A perpetual at 10x is a different product wearing the same brand. It never settles, so there’s no date on which being right pays you out. You hold it as long as you can fund it, and a move against you closes it. That isn’t a forecasting instrument at all. It’s crypto trading, hosted on a site that also sells forecasts.
When a platform announces both in the same quarter and the press writes it up as “prediction markets add leverage,” the second one hides behind the first.
What leverage actually does to you
Here’s the part the maturity story skips.
Unlevered, the worst case is brutal but bounded. You buy a share, you’re wrong, it goes to zero. You lose what you put in and nothing more. Borrow, and that floor disappears: the platform can close your position before the event resolves, on a temporary swing, even if your original call turns out right. You can be correct about the outcome and still get stopped out on the way there.
That last sentence is the whole argument, and it’s worth sitting with. Leverage quietly changes what you’re betting on. Unlevered, you’re forecasting an outcome. Levered, you’re forecasting the path: not just where the price ends up, but whether it stays inside your funding limits every day between now and then. Those are different skills, and nothing in reading a market well teaches you the second one.
It bites harder here than in most places for two reasons. These markets can be thin, and as the price-reading note covers, a thin market’s price jumps around on small trades. Leverage plus a jumpy price is how a small paper loss becomes a liquidation. And the whole appeal of a prediction market is the feeling that you know how something ends. Leverage is most dangerous when you feel most certain, and certainty is the emotion these markets are built to sell.
Why they’re doing it
This isn’t aimed at you or me. Leverage is how you court professional trading desks, because posting the full value of every position ties up money they’d rather use elsewhere. Offering margin tells institutions they can treat these like any other financial instrument now.
There’s a second motive, and it ties back to the legal fight I covered in the state-by-state breakdown. The more these platforms look like regulated derivatives exchanges, with brokers and margin and swap registrations, the stronger their argument that event contracts belong under the CFTC as financial products rather than under state gambling law. Looking professional is partly a legal costume.
Which produces a contradiction nobody in the industry says out loud. Ten-times leverage on a perpetual is about the most casino-shaped product you can build. The same move that makes these platforms look mature to a federal regulator makes them look exactly like the thing state regulators are already suing over. I don’t know how that resolves. I do know that a state attorney general reading about 10x perps will not come away thinking this is a sober forecasting tool.
Who this helps and who it hurts
For a professional desk, margin on event contracts is a real convenience. They price liquidation risk, they size for it, and freeing up capital is their job. Nothing about that is a scandal.
For a beginner, leverage is the fastest way I know to turn a learning year into a wipeout. The unlevered version is already risky enough to respect. Borrowing against a product you’re still learning to read is how people lose more than they ever meant to put at stake.
So treat leverage as a feature that doesn’t exist yet, and give it a year. The plain version of a prediction market already gives you everything you need to learn this and everything you need to lose money. You don’t have to borrow more rope to make it interesting.
Nothing here is financial advice. Prediction markets involve real risk, so never trade money you can’t afford to lose.