Robinhood launches US presidential election event contracts

Robinhood has launched US presidential election event contracts with Americans set to head to the voting booth in a week’s time on November 5. 

The trading platform rolled out the contracts to a select number of customers through its Robinhood Derivatives product, as of October 28.

However, Robinhood users must apply to access the product as well as meet what the firm has described as a “certain criteria” before they are approved for a Robinhood Derivatives account. 

To be eligible, customers must sign an attestation confirming that they are US residents, candidates and paid staff on US presidential campaigns, or candidates for any other elected federal or statewide public office. 

Once their accounts are approved, customers will then be able to trade based on their prediction on the winner of the US presidential election, out of Kamala Harris, the vice president, or Donald Trump, the former president. 

Robinhood 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.” 

The platform noted that election event contracts will be tradeable from October 28 through to November 1 within certain timeframes.

From November 3 until November 8, there “will be virtually 24-hour trading” on the market.

Robinhood added trading will remain open, albeit not for 24 hours, through to January 5. The election results are expected to be ratified on January 6, with payouts to be completed on January 7 and 8.

Robinhood said it will take 1¢ commission per contract for offering the market.

Earlier this month, legal election markets for the US presidential election were approved after the US Court of Appeals for the District of Columbia rejected an appeal from the Commodity Futures Trading Commission (CTFC). 

The commission had banned prediction market Kalshi from listing election markets last year, but saw its case fall short this time around, with Judge Jia Cobb ruling in favor of Kalshi on September 12. 

However, later that evening, the CTFC was granted a stay by the appeals court.  

That appeal, in which the commission argued that election markets could “incentivize the spread of misinformation by individuals or groups seeking to influence perceptions of a political party or a party candidate’s success”, was denied on October 2. 

Justifying its decision, the court explained that the CTFC had provided “no concrete basis” to conclude that event contracts would have such a damaging impact on the election process. 

As a result of the court’s ruling, Kalshi now boasts markets such as “Who will win the presidential election?” and “which party will win the senate?”

At the time of writing, $90,171,559 has been traded on Kalshi’s 2024 presidential election market, with Trump touted as the more likely victor at 61%.