Robinhood launches contracts to wager on presidential election
Robinhood on Monday said traders can begin using its platform to bet on the U.S. presidential election that is just over a week away.
Investors using Robinhood have the opportunity to make money by speculating on the outcome of the race between Vice President Kamala Harris and former President Donald Trump.
The trading platform said it would begin offering the contracts on Monday to a limited number of customers, who must be U.S. citizens.
Relatively new and viewed as high risk compared with more mainstream financial instruments such as stocks or bonds, event derivatives trading allows investors to buy and sell contracts to speculate on how certain events will play out.
The U.S. Commodity Futures Trading Commission tried to legally block election-outcome trading, with an appeals court upholding a federal court ruling in September that allowed it. The CFTC is appealing that ruling, which involved the trading platform Kalshi.
Interactive Brokers has also launched multiple political contracts, including those involving the election now eight days away.
Meanwhile, other betting markets, such as Polymarket, are predicting that Trump is favored to win the Nov. 5 election. Polymarket last week said a sole French trader was behind four accounts that spent millions to purchase the Trump contract. The international platform determined it was not market manipulation.
"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," said Robinhood in a statement.
Shares of Robinhood rose 3.1% in the wake of the company's announcement.