Robinhood, a popular trading platform, has introduced a new feature allowing users to bet on the outcome of the upcoming US presidential election.
The service began on Monday and is available to a limited number of US citizens. With just over a week until the election, Robinhood users can now speculate on who will win between Vice President Kamala Harris and former President Donald Trump.
The new betting option comes in the form of event derivatives, which are contracts that let investors predict the outcome of specific events. For this election, users can purchase contracts priced between $0.02 and $0.99, reflecting the market-implied odds of each candidate's chances of winning.
If users pick the winning candidate, they can earn a payout of $1 for each contract they own, with a maximum of 5,000 contracts per user, translating to potential earnings of up to $5,000, according to Forbes.
Robinhood's election betting program is part of a growing trend in political wagering. Other trading platforms, such as Interactive Brokers, have also started offering contracts related to the election.
Robinhood Expands Trading Hours
As the election date approaches, Robinhood plans to extend its trading hours, initially opening from 8 a.m. to 8 p.m. EDT for the first two days. Following that, trading will be almost continuous leading up to the election day on November 5.
However, the idea of betting on elections is not without controversy. The US Commodity Futures Trading Commission (CFTC) has raised concerns that such betting could undermine election integrity, as financial incentives might influence voter behavior, CBS News reported.
Recently, a federal court ruled in favor of allowing election betting, which has prompted discussions about the potential risks and rewards of this new form of speculation.
