FinTech News

Robinhood Introduces Presidential Election Market Event Contracts

by Kyle BurbankOct 29, 2024

Robinhood is launching its derivatives business by allowing some users to essentially bet on the results of the 2024 presidential election.

About the Presidential Election Market:

Earlier this month, Robinhood revealed plans to launch index options as well as futures trading. Both of these features come from Robinhood Derivatives (RHD). Now, RHD has announced event contracts — starting with those tied to the upcoming United States Presidential Election.

Starting this week, a limited number of Robinhood users who apply and are approved for an RHD account can participate in the Presidental Election Market. Customers will be able to buy contracts representing the electoral victories chances of either Democratic nominee Vice President Kamala Harris or Republican nominee former President Donald Trump. Robinhood points out that buying these contracts is not a form of voting but, instead, purchases represent who traders believe will win the election.

Trading of these contracts began on Monday and will continue during select hours through November 1st. Then, there will be “virtually 24-hour trading” available starting November 3rd. Note that trading will now be available between 5 p.m. Eastern and 5:15 p.m. Eastern each day and these contracts will not be tradable on Saturdays.

In terms of pricing, Robinhood said that the price for contracts will range between 2¢ and 99¢. Winning contracts will pay out $1 while losing contracts will pay nothing. These payouts will come when election results are certified in January.

More Robinhood news:

This announcement of the Election Market Event comes as another recently-announced Robinhood feature has now officially launched. Dubbed Robinhood Legend, a new desktop interface allows Robinhood traders to create custom dashboards with enhanced charts and functionality. To get started, customers can visit Robinhood.com/Legend.

My thoughts:

Where do I even start? First, for a company that’s often been accused by regulators of running a casino, enabling users to bet on — of all things — the presidential election seems odd. Of course, the only reason that this activity is (currently) legal in the first place is because of a lawsuit filed by the platform Kalshi against the Commodity Futures Trading Commission. Therefore, while it’s unlikely that Robinhood’s current Presidential Election Market will be shut down this time, the result of that suit could have implications for subsequent offerings of this nature.

Even though I’m not exactly sure this is a great idea, it seems that Robinhood shareholders approve as $HOOD rose 3% on Monday after the announcement. So, I guess we’ll see how this test of the platform’s event contracts goes over and see what other types of action Robinhood offers to users going forward.

Author

Kyle Burbank

Head Writer ~ Fioney

Kyle is the head writer for Fioney. He is a personal finance nerd, constantly looking for new apps and services to test and incorporate into his own financial game plan. In addition to his role at Fioney, he's written for other publications including Born2Invest, Lifehack, and Laughing Place, as well as his own site Money@30. He also creates personal finance and travel-related videos for Fioney's YouTube channel, which has garnered more than 2 million views. Currently, Kyle resides in Springfield, Missouri with his wife of 10 years. Together, they enjoy traveling (including visiting Disney Parks around the world), dining, and playing with their dog Rigby.

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