Kalshi Opens Its Prediction Markets to Brokerages

Event contracts—from sports to politics and pop culture—could join stocks and crypto on more traditional trading apps soon

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On Friday, Kalshi announced that it was approved to launch its prediction markets on brokerage firms. Companies like Robinhood and Interactive Brokers will be able to list Kalshi’s event contracts if they choose, though a partnership has not been announced yet.

Kalshi’s impending move into brokerages comes after its regulator, the CFTC, released its Jan. 17 modification letter allowing Kalshi’s contracts to be listed on brokerages. 

Kalshi’s ability to be listed on brokerages allows users to trade event contracts alongside stocks, crypto, and other financial instruments. This integration capability is a large step in making prediction markets mainstream sources of speculation and information, one of Kalshi’s stated goals.

Widespread event contract trading

Kalshi’s presence on brokerages will continue the finance industry’s trend of making itself increasingly accessible to ordinary customers. 

When financial trading firm Robinhood launched in 2013, one of its goals was to “make our user experience simple and intuitive.” Its easy user interface demystified investing and opened finance to many new traders. 

However, Robinhood’s focus on options trading led to critical coverage from the New York Times, which noted Robinhood’s use of push notifications to encourage users to trade the platform’s riskiest products. The same article reported that half of Robinhood’s customers had never traded before. 

A JPMorgan Chase research report found that “Individual participation in financial market investment expanded significantly over the past decade, with considerable growth during the COVID-19 pandemic.” An NIH study discovered that during the pandemic, individuals became more comfortable with risk-taking behaviors due to reduced to risk. Consequently, the JPMorgan Chase report noted: 

“The share of U.S. households with at least some stock holdings reached a record high as of 2022, according to data from the Federal Reserve,1 and the monthly percentage of individuals moving money from checking to brokerage accounts was three to four times higher during the pandemic than in the preceding years…A significant factor in the rise of investing participation was the widespread availability of online self-directed brokerage accounts.”

Kalshi’s expansion into brokerage firms will draw it further into the ongoing conversation regarding the pros and cons of easy access to volatile financial products.

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