RetailstocktradingcompanyRobinhoodnowallowsuserstotradeontheUSpresidentialelections.ThecompanyannouncedonMondaythatuserscantradeDonaldTrumporKamalaHarriscontractsonitsderivativesplatform.
Accordingtotheannouncement,thecontractswouldbeavailablefortradingduringspecifichoursbetweenOctober28andNovember8.OnOctober28and29,tradingwillbeavailablebetween8A.M.ETand8P.M.ET.ForOctober30and31,itwouldchangeto8A.M.ETand1A.M.ET,whileNovember1wouldbe8A.M.ETand10:30P.M.ET.
However,thecontractswouldbetradeableforalmost24hoursdailyduringtheelectionweek,whichstartsonNovember3andendsonNovember8.Theonlybreakwouldbefrom5P.M.ETto5:15P.M.EToneachofthedaysduringthisperiod.Meanwhile,therewouldalsobenotradingonallSaturdays.
Thecompanynotedthatitsderivativesunit,RobinhoodDerivatives,willofferthecontractthroughForecastEx,andthecontractswouldbepricedbetween$0.02–and$0.99.Theplatformaddedthatthenewproductisbasedoncustomerfeedback,whichisalsowhyitplanstolaunchfuturestradinginthecomingmonths.
Itsaid:
“Webelieveeventcontractsgivepeopleatooltoengageinreal-timedecision-making,unlockinganewassetclassthatdemocratizesaccesstoeventsastheyunfold.”
Meanwhile,onlyUScitizenscantradethecontracts,andtheyhavetoapplyforandgetapprovalbeforetrading.Theapplicationprocessrequiressigninganattestationformstatingthattheyarenotnon-USresidents,politicalcandidates,paidstaffofthepresidentialcampaignteams,orotherpeopleandinstitutionswhomighthaveavestedinterestintheoutcomeoftheelection.
Robinhoodgetsintothecrowdedelectionstradingsector
Withitsmove,Robinhoodjoinsthegrowinglistofplayersintherapidlyexpandingelectionspredictionsector.Despitethecontroversiesandcriticismsaboutbettingonelections,thesectorhasgrowninthelead-uptotheUS2024elections,withfirmssuchasKalshi,PreditIt,InteractiveBrokers,andPolymarketallinvolved.
TheCommoditiesFuturesTradingCommission(CFTC)iscurrentlyappealingafederalcourtrulingthatprohibitsitfrombanningelectionpredictionmarkets,butitlookslikenodecisionwillbemadeuntilaftertheelections.Still,thereareconcernsthattheelectionpredictionmarketscouldbesubjecttomanipulationduetotheirlimitedliquidity.
Blockchain-basedpredictionsplatformPolymarkethasbeenatthecenterofthisconcernafterdiscoveringthatoneFrenchtraderswungtheoddsinTrump’sfavorbybetting$26milliononhiswin.However,theplatformclaimsitsinvestigationshowsthattraderbetswerenotmarketmanipulationbutbasedonpersonalconviction.
Robinhoodistryingtolimitanyconcernofmanipulationbyensuringthatonlythosewhodonothaveanyulteriormotivescantradethepredictionsmarkets.WithitstradersrestrictedtoUSresidents,theplatformoddsmightalsobetterreflecttheopinionofvotersinthecountrycomparedtoPolymarket,whichisonlyopentonon-USresidents.Still,expertsbelievethattheoddsofanelectionbettingplatformdonotnecessarilyreflecttheelectionoutcome.
RobinhoodoutperformsS&Pin2024
Meanwhile,RobinhoodstockHOODisup3%followingtheannouncement,continuingaverypositiveyearforitsstock.RobinhoodstockHOODisupby112%YTD,outperformingtherestofthebroaderS&Pmarket,whichisonlyup21.77%.
RobinhoodhasoutperformedS&PsignificantlyasatthecloseoftradingonOctober25–LSEGDatastream
HOOD’sperformanceisduetoitsnewproductlaunches,includingtheintroductionofderivativestradingtoitsappatafee,ashiftfromitscommission-freetrading.Thecompanyhasalsofocusedmoreonprofitabilityandbenefitsfromthereturnofretailinvestors,whichhascauseditstradingvolumetoincrease.
cryptopolitan.com