Polymarket Pushes Margin Trading As Banks Tighten Rules

Polymarket sought broader U.S. regulatory permissions as Wall Street banks tightened controls around prediction-market trading. The parallel moves showed how rapid market growth was colliding with leverage and insider-information concerns.

The regulatory push could expand Polymarket’s derivatives offering if authorities approve the required registrations. However, recent compliance restrictions at major banks showed that institutional participation carried growing internal risks.

Polymarket Seeks U.S. Margin Trading Expansion

Polymarket reportedly sought U.S. regulatory approval to introduce margin trading through PM Derivatives LLC. The structure could let customers open larger positions without funding the full notional exposure upfront.

Regulatory filings reportedly showed applications tied to futures commission merchant registration and National Futures Association membership. The company would still face Commodity Futures Trading Commission requirements before launching covered leveraged services.

Margin trading would broaden Polymarket’s business beyond fully funded event contracts. It could also attract professional traders seeking greater capital efficiency across derivatives positions.

However, leverage would add another layer of risk to event markets. Losses can rise faster when traders control positions larger than their posted collateral.

The expansion also comes as competition with Kalshi intensifies. Both platforms have benefited from rising activity around sports, politics and financial events.

Volume comparisons require caution because market-data providers use different methodologies. Some datasets separate international and U.S. activity, while others aggregate broader notional turnover.

Prediction Markets Plagued With Insider Trading, Says Goldman Sachs

According to the latest CNBC report, there have been growing concerns among Wall Street banks regarding the insider trading risks on prediction market platforms. The report said Goldman Sachs has prohibited employees from trading prediction market contracts related to the bank, elections, financial markets, macroeconomic data, and geopolitical events.

As per the source, these restrictions are to avoid any potential conflicts arising from the use of material nonpublic information. CNBC also reported that Morgan Stanley already has similar policies in place. At the same time, Bank of America is upgrading its internal guidelines for employee participation on platforms like Polymarket and Kalshi.

The policy changes come after U.S. regulators charged a Google employee in May. The regulators charged the employee with using nonpublic information to generate approximately $1.2 million in profits through Polymarket contracts.

With their recent actions, the goal of the authorities is to prevent the misuse of confidential data.

FIFA 2026 Fever Grips Polymarket

As of now, some of the biggest bets played out on Polymarket belong to the FIFA 2026 matches. Just ahead of the historic Argentina vs Egypt match earlier this week, someone betted over $2,300 for an exact 3-2 score. Interestingly, the user cashed out over $100,000 for the same.

Polymarket currently assigns the France national football team the highest probability of winning the 2026 FIFA World Cup. Argentina national football team ranks second with 17.8%, followed by Spain national football team at 16.7% and England national football team at 16.0%.

The above chart also shows a sharp recent surge in France’s implied probability, rising from the mid-teens percentage range to nearly 40%. However, the implied odds for Argentina, Spain, and England have remained relatively stable around the 16% to 18% range