With the United States presidential campaigns in the home stretch, trading platform Robinhood has now entered the prediction market for the November 5 polls.
Starting today, October 28, the platform’s users can trade contracts for Kamala Harris or Donald Trump, with the product offered through Robinhood’s Derivatives unit and ForecastEx, Robinhood said in a statement.
According to Robinhood, the product, available exclusively to United States citizens, will be priced between $0.02 and $0.99 per contract. For each correct prediction, a payout of $1 will be received.
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“Event contracts allow customers to trade on the outcome of specific events, such as whether a candidate will win an election. <…> There will be two contracts to choose from–one for Kamala Harris and one for Donald Trump,” Robinhood noted.
Growing demand for betting products
Robinhood indicated that the rollout aims to capitalize on the growing demand for prediction products. This demand has been elevated following a federal court ruling that gave Americans the green light to bet on elections.
Indeed, this adds to the company’s latest new product rollouts, which began early this month with the introduction of futures and index options trading features to its mobile app for a fee.
It remains to be seen how the market will react to Robinhood’s venture into the prediction election prediction will play out amid the heated presidential campaign, which analysts indicate remains close.
Other betting platforms, such as Polymarket and Kalshi, have seen the Republican nominee gain significantly in recent weeks. However, this trend may not necessarily reflect the actual political polls in the wake of manipulation concerns.
At the same time, prediction markets have grown in importance in the financial sector, with several investment products hinting at a likely winner.
For instance, as previously reported by Finbold, when Trump’s winning odds increased, so did the price of Bitcoin (BTC), given his expressed support for the digital asset sector if elected. A similar trend was observed in the U.S. dollar and government bond yield trajectory.
HOOD stock price analysis
On the other hand, investors are seemingly reacting positively to Robinhood’s venture into predictions. HOOD is currently trading at $27.96, up over 2% from Friday’s close. The stock has been on a tear in 2024, gaining around 123% year-to-date.
If the current rally is sustainable, HOOD will aim to breach the $30 resistance level. However, Wall Street consensus projects a downside for the stock over the next 12 months, with an average price forecast of $25.
Featured Image:
Ink Drop, United Kingdom, January 2021, Digital Image, Shutterstock.
