Trading platform Robinhood (HOOD.O) has launched a new prediction markets hub within its app, allowing users to trade on the outcomes of significant events, including the anticipated upper limit of the Federal Reserve’s interest rate in May and upcoming college basketball tournaments. Following this announcement, Robinhood’s shares rose by 6% in afternoon trading.
This expansion comes as prediction markets gain traction as a financial tool that merges various events into trading strategies. JB Mackenzie, Vice President and General Manager of Futures and International at Robinhood, stated, “We believe in the power of prediction markets and think they play an important role at the intersection of news, economics, politics, sports, and culture.”
He expressed excitement about offering customers a new way to engage in prediction markets while ensuring compliance with existing regulations. Robinhood Derivatives, LLC (RHD) has introduced this standalone prediction markets hub, enabling users to engage in event-based trading by purchasing contracts tied to real-world outcomes.
Initially, traders can speculate on the Federal Reserve’s interest rate decisions and the outcomes of men’s and women’s college basketball tournaments. The hub operates through KalshiEX LLC, a regulated exchange overseen by the Commodity Futures Trading Commission (CFTC).
The new feature aligns with Robinhood’s mission to make financial markets more accessible and underscores a growing trend where platforms integrate real-world events into trading strategies. While the initial offerings focus on interest rates and sports, the firm plans to expand into elections, corporate earnings, and geopolitical developments.
Robinhood has been in close discussions with the CFTC to ensure regulatory compliance while expanding its offerings. The prediction markets hub is currently rolling out and will be available to all eligible users across the U.S. in the coming days. Notably, Robinhood suspended Super Bowl event contracts just a day after their launch last month, following a request from the CFTC.
Shogun Lin
