Robinhood lets traders bet on 2024 presidential race

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Robinhood lets traders bet on 2024 presidential race
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Robinhood, which boasts more than 20 million users, said in a Monday news release that it has launched election contracts. Event contracts allow people to bet on either Vice Presidentduring this election cycle. Polymarket and PredictIt have been two of the heaviest hitters, but Robinhood moving into the space could be a big deal, given the number of people who use the brokerage platform.

Each share is priced based on bets for and against it on a scale from $0.00 to $1. Those share prices also imply probability. So if a Harris share is valued at 34 cents , it implies she has a 34% chance of being the Democratic nominee. Users can swing the odds in markets with low trading volume by buying large numbers of Trump or Harris shares, changing the implied odds.

Koleman Strumpf, a professor at Wake Forest University who is an expert in political betting markets and has studied them for decades,over the summer that betting markets contain valuable information because people on the platform have skin in the game and tend to do research. “It’s not a crystal ball, like the stock market isn’t a crystal ball, but it wraps up the opinion of a lot of people who generally are pretty smart with the idea that, why are they smart? Because they are putting money on the line,” Strumpf said.On PredictIt, shares of Trump were going for 61 cents on Monday morning. On Polymarket, where there is $2.2 billion in volume, bettors are assessing a 66% chance of a Trump victory in November.

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