Investing.com -- Robinhood (NASDAQ:HOOD) has announced a new derivatives contract that will allow investors to wager on the Nov. 5 US presidential election.
In a statement on Monday, Robinhood, which is known as a popular tool for retail investors, said it will offer so-called event contracts that will give users the chance to bet on either Trump or Harris. Event derivatives trading revolves around the buying and selling of contracts related to specific events like elections, policy decisions and economic data releases without the underlying assets linked to these events.
Event contracts will be included in its Robinhood Derivatives service, the company said. Earlier this month, Robinhood rolled out fee-based futures and index options trading features on its mobile app, signifying a departure from Robinhood's typical commission-free trading structure.
Customers must apply and "meet certain criteria" to be approved for the Robinhood Derivatives account that will allow them to access event contracts, the group noted, adding that only US citizens will be able to trade them. A limited number of users will be able to access these contracts starting on Monday.
"We believe event contracts give people a tool to engage in real-time decision-making, unlocking a new asset class that democratizes access to events as they unfold," Robinhood said.
Although national polling data shows the race between Donald Trump and Kamala Harris is a dead heat heading into the final frantic days of campaigning, prediction platforms like PredictIt, Polymarket and Kalshi have suggested that Trump holds a sizeable advantage over his Democratic rival.
However, reports have said that large bets may have heavily impacted these markets, with The Wall Street Journal saying Trump's lead on the cryptocurrency-based Polymarket in particular may be due to a roughly $30 million wave of wagers from supporters of the former president.
(Reuters contributed reporting.)