• Robinhood now presents contracts for customers to wager on the 2024 US election consequence.
• Eligible US residents can purchase “Yes” contracts and settle after the January certification.
• Opponents like Kalshi and Polymarket provide related high-demand prediction markets.

Robinhood, the favored funding app, has made a major growth into prediction markets by launching contracts that enable customers to take a position on the 2024 US presidential election consequence.

This transfer locations Robinhood in direct competitors with established prediction platforms like Kalshi and Polymarket, each of which supply related political occasion contracts.

The Robinhood US presidential election contracts

As of this week, Robinhood Derivatives customers should purchase “Yes” contracts that predict a selected candidate will win the presidential election. Every contract’s worth, decided by demand, can attain up to $1.00.

If the prediction proves correct, the contract holder will obtain $1.00 after the US Congress certifies the election outcomes on January 6, 2025. These with incorrect predictions will obtain no payout.

Robinhood limits participation to US residents with a person investing account that qualifies for particular options, equivalent to margin investing or Degree 2/3 choices buying and selling. This restriction aligns with the platform’s effort to make sure customers have expertise with higher-risk monetary merchandise.

Along with hypothesis, Robinhood gives customers with flexibility by way of an choice to shut positions earlier than the election consequence is understood. This course of entails buying an opposing “No” contract to offset an current “Yes” place, permitting customers to mitigate potential losses or lock in earnings primarily based on evolving market sentiment.

Robinhood doesn’t, nevertheless, allow customers to carry concurrent “Yes” positions on a number of candidates, a coverage geared toward decreasing complexity and guaranteeing readability in consumer portfolios.

Political hypothesis market on the rise

Robinhood’s entrance into prediction markets comes as public curiosity in political hypothesis is climbing.

Simply earlier this month, a federal appeals court docket upheld a ruling permitting Kalshi, a outstanding competitor, to supply election-related contracts. Kalshi’s latest success within the App Retailer underscores this rising demand, because the platform has climbed to the highest of the finance class, even surpassing giants like Fb and Uber.

Kalshi presents excessive liquidity, allowing bigger trades with out impacting market pricing—a distinction its CEO, Tarek Mansour, highlighted in distinction to Robinhood’s new contracts, which have smaller liquidity limits.

In the meantime, platforms like Polymarket and PredictIt additionally present election consequence contracts, with values fluctuating primarily based on consumer sentiment and real-time developments.

By including occasion contracts to its choices, Robinhood not solely broadens the choices accessible to its customers but additionally faucets right into a sector of economic markets pushed by present occasions and speculative curiosity, making political outcomes a brand new frontier for retail buyers.