Robinhood stock price climbs 4% after debuting presidential election betting

Robinhood Markets (HOOD) experienced a nearly 4% increase in its stock price, reaching $28, following the US market's opening on Monday, according to Yahoo Finance data. This surge came after the company unveiled its new political prediction market, enabling trading on the outcome of the upcoming US presidential election.

Robinhood Launches Election Prediction Trading Ahead of Presidential Vote

The launch comes just eight days before the election, allowing users to trade contracts for candidates Kamala Harris and Donald Trump through Robinhood’s Derivatives unit. Initially available to a select group of customers, participants must meet specific criteria, including US citizenship. This new offering follows Robinhood’s recent expansion into 24/5 trading and upcoming futures trading, reflecting its commitment to providing real-time market access.

Prediction markets experienced a significant surge in the third quarter of this year, with a 565% increase in betting volume, reaching $3.1 billion, according to a recent CoinGecko report. This growth was largely fueled by anticipation surrounding the US presidential election and its potential impact on cryptocurrency regulations.

Polymarket, a leading decentralized platform, captured over 99% of the market share, with $1.7 billion wagered on the "US Presidential Election Winner," accounting for about 46% of its annual volume. As of October 27, Polymarket's total value locked was $302 million, marking an increase of nearly 140% in the past month, according to DefiLlama data.

Wintermute Launches "OutcomeMarket" to Capitalize on US election

In addition to Robinhood, Wintermute is looking to leverage the rising interest in prediction markets. Last month, Wintermute announced plans to launch "OutcomeMarket," a new prediction platform focused on the upcoming US presidential election.

OutcomeMarket will be a multi-chain platform allowing users to trade contracts based on election outcomes for Donald Trump and Kamala Harris, and is expected to introduce two tokens, TRUMP and HARRIS, which can be traded on decentralized applications and centralized exchanges.

Robinhood stock price climbs 4%

Robinhood has reaffirmed its full-year operating expenses forecast of $1.85 billion to $1.95 billion, originally provided in August. The management emphasized that the company is focusing on investing in new products, features, and international growth.

Cost control will be crucial as the emerging broker aims to achieve its first annual profit in 2024, targeting earnings of 73 cents per share, following a reduction in losses to 61 cents in 2023.

Shares rose o.6% to 28.21 on the stock market today. After the earnings release, shares plummeted more than 10% in extended trading. Robinhood stock, after climbing in six of the past seven weeks, ended Wednesday in a profit-taking zone above a September cup-with-handle breakout.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.