Robinhood shares (NASDAQ: HOOD) climbed greater than 10% yesterday (Wednesday) after the retail brokerage introduced plans to launch its personal futures and derivatives alternate, deepening a push into prediction markets that has grow to be the corporate’s fastest-growing income supply.
Till now, the fintech had been increasing its providing by way of Kalshi, producing greater than 50 p.c of the platform’s buying and selling quantity. By launching its personal alternate, Robinhood can checklist contracts straight as an alternative of relying solely on distributing Kalshi’s merchandise.
The brokerage is partnering with Susquehanna Worldwide Group to accumulate a 90% stake in MIAXdx, a derivatives platform beforehand often called LedgerX. Miami Worldwide Holdings, which at present owns the alternate, will retain a ten% curiosity within the enterprise. Robinhood will management the brand new entity, whereas Susquehanna gives liquidity on day one.
The inventory closed at $128.20, up almost 11%, making it the highest performer within the S&P 500 on Wednesday. Shares have climbed 215% this yr, the second-best exhibiting within the index.
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Robinhood’s shares look like consolidating close to the all-time highs examined in early October, round 154 {dollars}. A transfer again above the 50-day EMA may give the corporate room to retest these ranges.
Robinhood shares technical evaluation. Supply: Tradingview.com
Customers Guess on All the things From NFL Video games to Fed Choices
Robinhood launched prediction market contracts in March by way of a partnership with Kalshi, simply forward of the NCAA basketball event. Customers can now wager on outcomes starting from sports activities outcomes to Federal Reserve rate of interest strikes.
Greater than 9 billion contracts have traded arms since launch, with over 1 million prospects taking part on the platform. The corporate reported 2.3 billion occasion contracts traded within the third quarter alone, greater than double the prior quarter.
“Robinhood is seeing robust buyer demand for prediction markets, and we’re excited to construct on that momentum,” mentioned JB Mackenzie, the corporate’s common supervisor for futures and worldwide.
Road Sees Income Windfall From Betting Increase
Bernstein analysts estimate Robinhood’s prediction market enterprise is on observe to generate over $300 million in annualized income. The agency maintains a Purchase ranking with a $160 value goal, the best on Wall Road.
Bernstein analyst Gautam Chhugani
“With HOOD already accounting for greater than 50% of Kalshi market volumes, we imagine HOOD needs to leverage its distribution edge to assert the next share of the market income pool,” Bernstein analyst Gautam Chhugani wrote Wednesday.
The brand new alternate will enable Robinhood to checklist and clear contracts straight moderately than relying solely on its Kalshi partnership. Analysts at Cantor Fitzgerald famous the CFTC licenses acquired by way of MIAXdx may also allow the corporate to supply conventional futures and choices merchandise.
Rivals Race to Seize Rising Market
The transfer comes as prediction markets entice surging curiosity from each crypto and fintech corporations. Kalshi logged $4.47 billion in buying and selling quantity over the previous month, whereas rival Polymarket reported $3.58 billion.
Crypto.com just lately launched its personal prediction market with plans to combine Trump Media, and Gemini has filed for regulatory approval to open the same market. Stories counsel Coinbase can be exploring an entry into the house.
The alternate is anticipated to start operations in 2026 following completion of the MIAXdx acquisition. Robinhood plans to make the platform accessible to different brokerage corporations, not simply its personal prospects.
