Prediction Markets Expand Into U.S. Stocks as Regulators Examine New Trading Model

Individual Stocks Become a New Prediction Market Category

WASHINGTON, U.S., September 28, 2026, ZEX PR WIRE — Prediction markets have traditionally allowed participants to trade contracts based on the outcome of events. The model has expanded rapidly in recent years, and platforms are now offering contracts connected to movements in publicly traded companies.

The growth remains small compared with conventional stock markets, but the increasing number of contracts has attracted attention from regulators and market experts.

Polymarket International began offering markets tied to individual stocks last October. According to the Allium analysis prepared for Reuters, activity has since expanded across tens of thousands of equity linked markets.

The development creates a new way for market participants to take positions on specific corporate events or stock movements without purchasing the underlying shares directly.

Nvidia, Alphabet and Apple Among Popular Names

Individual technology companies have emerged as some of the most actively traded names.

Nvidia, Alphabet, Apple and Tesla were among the most popular stocks in Polymarket’s equity linked markets, according to the Allium data. The remaining activity covered exchange traded funds and broader stock indexes.

The concentration around major technology companies reflects the large amount of attention investors already place on these businesses.

AI developments, earnings announcements, product launches and other corporate events can create substantial interest around individual companies, giving prediction market operators a large pool of potential contracts.

However, these contracts are structurally different from conventional shares.

Regulatory Questions Become More Important

The expansion has attracted scrutiny because U.S. securities and derivatives markets operate under established regulatory frameworks.

Reuters reported that U.S. law generally treats contracts tied to individual stock movements as swaps that fall under Securities and Exchange Commission oversight and are mostly restricted to professional investors.

That creates an important regulatory question as prediction platforms introduce products that resemble financial contracts linked to publicly traded companies.

The SEC and Commodity Futures Trading Commission have been reviewing the regulatory treatment of equity linked prediction markets. Neither agency provided a comment to Reuters for its report.

The issue is particularly relevant because prediction markets can operate differently from traditional stock exchanges, potentially creating differences in disclosure, surveillance and investor protections.

A Different Route to Market Exposure

Prediction markets do not necessarily replace conventional stock trading.

Instead, they create another mechanism through which participants can express expectations about market outcomes. Depending on the contract structure, a trader might speculate on whether a stock will rise or fall over a defined period rather than purchasing the underlying security.

That distinction could become increasingly important if equity prediction markets continue to grow.

For companies whose shares become heavily represented across these platforms, another question is whether activity in prediction contracts could eventually influence trading in the underlying stocks.

Reuters cited regulatory experts who said rapid growth could eventually create challenges for market surveillance and investor protection if these markets become large enough to affect the underlying securities.

The Market Structure Is Still Developing

The current scale of equity prediction markets remains small compared with traditional U.S. stock exchanges.

Nevertheless, the rapid expansion of contracts tied to individual companies shows that prediction markets are moving into territory historically dominated by securities and derivatives exchanges.

The next stage will likely depend heavily on how regulators classify these products and which investor protections apply to them.

For financial markets, the development represents another example of technology creating alternative venues for trading market expectations. Whether those venues eventually become a significant part of the broader investment landscape will depend on their growth, liquidity and regulatory treatment.