Barclays says prediction markets gain traction with retail traders, challenging leveraged ETPs

Prediction markets are becoming a fast-growing retail trading venue, with Barclays analysts saying monthly notional volume has surged since the 2024 U.S. presidential election and is beginning to rival other speculative products. Barclays said 2026 monthly notional volume in prediction markets is now close to leveraged exchange-traded products and comparable to covered-call strategies on indexes and single stocks. The firm said retail use of derivatives has also risen sharply, with zero-day-to-expiration options now accounting for more than half of total S&P 500 options volume. Dune Analytics data show total notional volume on Kalshi and Polymarket exceeded $24 billion through April 2026, up from less than $5 billion a year earlier. Most activity is tied to noneconomic events, led by sports contracts. Barclays said the market remains far smaller than S&P 500 0DTE options, which reached $57 trillion in total volume in March 2026.