Robinhood Markets (NASDAQ: HOOD) recently launched 2024 election contracts and in one week the company passed an impressive milestone as Election Day (Nov. 5) nears.
What Happened: Robinhood CEO Vlad Tenev shared on X that the company passed 100 million contracts traded in less than a week since launching election contracts.
The news comes as interest in prediction markets for the 2024 election has soared with Polymarket and Kalshi attracting bets from people around the world.
Robinhood's election contracts launched to select users and have a U.S. citizenship requirement. Polymarket is only available to users outside the U.S. Kalshi is regulated by the Commodity Futures Trading Commission in the U.S.
On Robinhood, the 2024 election contracts show Donald Trump as the favorite at 57 cents and Vice President Kamala Harris the underdog at 45 cents. Each contract will cash out at $1 for the winning presidential candidate.
Why It's Important: The new election contracts give Robinhood users another investment option alongside stocks, options and cryptocurrency.
One of the key differences between Robinhood's contracts and the main Polymarket prediction market for the 2024 presidential election is the closing date for the market.
Polymarket, which has attracted $2.9 billion in wagers on the 2024 presidential matchup, has Trump as the favorite at 59.1% with Harris behind at 40.9%. Harris narrowed the gap over the weekend to 46.2% to Trump's 53.8% before dropping again. In late October, Trump's odds showed a commanding lead of around 66%.
On Polymarket, winning contracts also cash out at $1, with users able to deposit funds using USDC via the Polygon network or directly from a crypto account with Ethereum.
Polymarket's prediction market for the 2024 election will cash out when the Associated Press, Fox and NBC all call the election for the same candidate. If this does not occur, the market will stay open until inauguration day, Jan. 20, 2025.
Robinhood's contracts do not close until the end of trading on Jan. 5, 2025, with a payout date of Jan. 8, 2025. The counting of electoral votes in Congress occurs on Jan. 6, 2025, to certify the election results.
There is a high likelihood that the results are known before January, which could give Robinhood traders the ability to sell their contracts at a profit. The question is if they can get close to the full $1 payout or need to wait until the payout date.
The success of the 2024 election contracts could lead to more on this front from Robinhood.
"Just this week, we launched our Presidential Election Market. We have a ton of momentum, and we're just getting started," Tenev said after Robinhood's third-quarter financial results.
HOOD Price Action: Robinhood stock is down 0.13% to $23.93 on Monday at publication versus a 52-week trading range of $7.91 to $28.58. Robinhood stock is up 97% year-to-date in 2024.