Election Day outcome bets on Robinhood offer chance to profit on close contest
Do you have a hunch about which presidential frontrunner will win the 2024 election? Trading app Robinhood has rolled out contracts to bet on, but time is running out.
Last week, Robinhood made presidential election contracts available to all eligible customers, allowing traders to put their money in an event market for the election.
"Will Kamala Harris or Donald Trump win the 2024 presidential election? Get $1 for every contract you own if your candidate is certified in January—and nothing if they aren't," Robinhood’s website reads. "Or close your position before January 6, 2025. This is a market, not voting."
The Commodity Futures Trading Commission (CFTC) classifies event or forecast contracts as "swaps," as their value depends on whether a specific event happens at that specific time. It’s based on "yes" or "no" questions about the event.
WHAT DO BETTING MARKETS SAY ABOUT CONTROL OF CONGRESS?
In Robinhood’s case, the two event questions are: Will Kamala Harris win the U.S. presidential election in 2024?; and will Donald Trump win the U.S. presidential election in 2024?
Trading hours are open from 8 a.m. to 8 p.m. ET daily, but Robinhood says that on Election Day and afterward it "may be difficult to close position."
Users can only own the "yes" contract for one candidate, and each contract owned will pay $1 or $0 on January 7 when the election is certified by Congress.
"The payout, or settlement, is $1 or $0 per contract owned depending on the outcome of the event on January 7, 2025," the Robinhood website states.
CEO and co-founder of Robinhood, Vlad Tenev, posted on X Sunday evening that 100 million contracts have been traded in less than a week.
X users have also chimed in on their contracts made so far, with one account claiming to have put $3,300 dollars into Trump contracts. "It seems the vast majority of other investors also favor Trump. The payout is 5 large.. not too shabby," the post reads.
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In-app screenshots from other X accounts on Monday morning indicate more than 90 million contracts have been placed on Harris winning, and nearly 83 million contracts have been placed on Trump winning.
Other platforms have also introduced election-based betting markets, including Kalshi, Interactive Brokers and PredictIt.