- Robinhood now affords contracts permitting customers to guess on the result of the 2024 US elections.
- Eligible U.S. residents should purchase “Sure” insurance policies and pay after January certification.
- Opponents like Kalshi and Polymarket supply comparable prediction markets with excessive demand.
Robinhood, the favored investing app, has seen a major growth into prediction markets by launching contracts permitting customers to take a position on the result of the 2024 US presidential election.
The transfer places Robinhood in direct competitors with established prediction platforms like Kalshi and Polymarket, each of which provide comparable political occasion contracts.
Robinhood US Presidential Election Contracts
Beginning this week, Robinhood Derivatives customers should purchase “Sure” contracts that predict a selected candidate will win the presidential election. The worth of every contract, decided by demand, could be as much as $1.00.
If the prediction seems to be right, the contract holder will obtain $1.00 after the U.S. Congress certifies the election outcomes on January 6, 2025. These whose predictions are incorrect won’t obtain any cost.
Robinhood limits participation to U.S. residents with a person funding account eligible for particular options, resembling margin investing or Stage 2/3 choices buying and selling. This restriction aligns with the platform's efforts to make sure customers expertise higher-risk monetary merchandise.
Along with hypothesis, Robinhood affords customers flexibility by way of an possibility to shut positions earlier than the election result’s identified. This course of entails buying an opposing “No” contract to offset an present “Sure” place, permitting customers to mitigate potential losses or lock in earnings primarily based on altering market sentiment.
Robinhood doesn’t, nonetheless, permit customers to carry simultaneous “Sure” positions on a number of candidates, a coverage supposed to scale back complexity and guarantee readability of person portfolios.
The political hypothesis market on the rise
Robinhood's entry into prediction markets comes as public curiosity in political hypothesis will increase.
Earlier this month, a federal appeals courtroom upheld a ruling permitting Kalshi, a high contender, to supply election-related contracts. Kalshi's current success on the App Retailer highlights this rising demand, because the platform has risen to the highest of the finance class, even surpassing giants like Fb and Uber.
Kalshi affords excessive liquidity, permitting bigger transactions with out affecting market costs – a distinction that its CEO, Tarek Mansour, highlighted in comparison with Robinhood's new contracts, which have smaller liquidity limits.
In the meantime, platforms resembling Polymarket and PredictIt additionally supply contracts on election outcomes, whose values fluctuate primarily based on person sentiment and real-time developments.
By including event-driven contracts to its choices, Robinhood not solely expands the choices out there to its customers, but additionally faucets right into a monetary markets sector pushed by information and speculative curiosity, making political outcomes a brand new frontier for retail buyers .
