Robinhood launches contracts to bet on presidential elections

Robinhood said Monday that traders can start using its platform to bet on the U.S. presidential election, which takes place in just over a week.

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 start offering the contracts on Monday to a limited number of customers, who must be US citizens.

Event derivatives trading is relatively new and is considered high risk compared to more mainstream financial instruments such as stocks or bonds. It 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 trading of election results, with an appeals court upholding a federal court ruling in September that allowed it. The CFTC is appealing this ruling, which involved the Kalshi trading platform.

Interactive Brokers has also launched several political contracts, including those related to the elections that are now eight days away.

Meanwhile, other betting markets, such as Polymarket, predict that Trump is favored to win the November 5 election. Polymarket said last week that a sole French trader was behind four accounts that spent millions to buy the Trump contract. The international platform determined that it was not market manipulation.

“We believe event contracts give people a tool to make decisions in real-time, unlocking a new asset class that democratizes access to events as they happen,” Robinhood said in a statement.

Shares of Robinhood rose 3.1% after the company’s announcement.