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Share link:In this post: Robinhood now offers betting on the outcome of Trump v Harris elections. The retail brokerage platform restricts betting to only US residents likely to limit manipulations. Robinhood is having a good year and has risen by more than 100% this year.
Retail stock trading company Robinhood now allows users to trade on the US presidential elections. The company announced on Monday that users can trade Donald Trump or Kamala Harris contracts on its derivatives platform.
According to the announcement , the contracts would be available for trading during specific hours between October 28 and November 8. On October 28 and 29, trading will be available between 8 A.M. ET and 8 P.M. ET. For October 30 and 31, it would change to 8 A.M. ET and 1 A.M. ET, while November 1 would be 8 A.M. ET and 10:30 P.M. ET.
However, the contracts would be tradeable for almost 24 hours daily during the election week, which starts on November 3 and ends on November 8. The only break would be from 5 P.M. ET to 5:15 P.M. ET on each of the days during this period. Meanwhile, there would also be no trading on all Saturdays.
The company noted that its derivatives unit, Robinhood Derivatives, will offer the contract through ForecastEx, and the contracts would be priced between $0.02 – and $0.99. The platform added that the new product is based on customer feedback, which is also why it plans to launch futures trading in the coming months.
It said:
“We believe event contracts give people a tool to engage in real-time decision-making, unlocking a new asset class that democratizes access to events as they unfold.”
Meanwhile, only US citizens can trade the contracts, and they have to apply for and get approval before trading. The application process requires signing an attestation form stating that they are not non-US residents, political candidates, paid staff of the presidential campaign teams, or other people and institutions who might have a vested interest in the outcome of the election.
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Robinhood gets into the crowded elections trading sector
With its move, Robinhood joins the growing list of players in the rapidly expanding elections prediction sector. Despite the controversies and criticisms about betting on elections, the sector has grown in the lead-up to the US 2024 elections, with firms such as Kalshi, PreditIt, Interactive Brokers, and Polymarket all involved.
The Commodities Futures Trading Commission (CFTC) is currently appealing a federal court ruling that prohibits it from banning election prediction markets, but it looks like no decision will be made until after the elections. Still, there are concerns that the election prediction markets could be subject to manipulation due to their limited liquidity.
Blockchain-based predictions platform Polymarket has been at the center of this concern after discovering that one French trader swung the odds in Trump’s favor by betting $26 million on his win. However, the platform claims its investigation shows that trader bets were not market manipulation but based on personal conviction.
Robinhood is trying to limit any concern of manipulation by ensuring that only those who do not have any ulterior motives can trade the predictions markets. With its traders restricted to US residents, the platform odds might also better reflect the opinion of voters in the country compared to Polymarket, which is only open to non-US residents. Still, experts believe that the odds of an election betting platform do not necessarily reflect the election outcome.
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Robinhood outperforms S&P in 2024
Meanwhile, Robinhood stock HOOD is up 3% following the announcement, continuing a very positive year for its stock. Robinhood stock HOOD is up by 112% YTD, outperforming the rest of the broader S&P market, which is only up 21.77%.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.