With Election Day within the US solely a couple of week away, on-line dealer Robinhood has introduced that customers can now commerce US presidential election contracts.
Those that meet the eligibility standards, particularly being a US citizen, can wager on whether or not they suppose Kamala Harris or Donald Trump will win the presidential election.
Key Highlights
- Robinhood’s solely presidential election markets are on Kamala Harris or Donald Trump to win.
- Customers have to be US residents and have a sound derivatives account to commerce election contracts.
- Kalshi’s authorized victory over the Commodity Futures Buying and selling Fee opened the door for Robinhood.
Markets Restricted to the Two Us Presidential Candidates
Political contracts buying and selling has elevated in reputation over the past couple of election cycles and now Robinhood, one of the crucial widespread monetary buying and selling platforms within the US, has gotten into the sport.
On Monday, October 28, the corporate introduced that it has launched presidential election occasion contracts. The one contracts out there for buying and selling on Robinhood are Democrat Kamala Harris or Republican Donald Trump for president.
To be eligible to commerce election contracts, Robinhood customers have to be US residents and will need to have an accredited derivatives account.
“We consider occasion contracts give individuals a software to interact in real-time decision-making, unlocking a brand new asset class that democratizes entry to occasions as they unfold,” the corporate mentioned in its Monday press launch.
Election Day is formally Tuesday, November 5, however early voting is at present open across the nation.
Inventory Market-Like Betting
Led primarily by Polymarket and PredictIt, election buying and selling has been on the rise lately.
It has been in a authorized grey space within the US, however that murkiness was cleared up earlier this month when Kalshi gained its federal attraction towards the Commodity Futures Buying and selling Fee (CFTC), which had banned it from providing political contract buying and selling.
the extra individuals suppose one candidate will win, the upper that candidate’s worth goes
Kalshi now has its election markets up and working, which led to Robinhood’s transfer.
Election contracts buying and selling is betting, however not within the conventional sense. Moderately than putting a wager with odds, contracts buying and selling is akin to taking part in the inventory market.
Customers can purchase contracts, successfully shares, in a candidate to win or lose. Costs per contract usually vary from $0.01 to $0.99, although some platforms provide fractional cents.
These costs are set by the market – the extra individuals suppose one candidate will win, the upper that candidate’s worth goes.
Those that maintain contracts of the profitable candidate may have them paid off at $1 per contract. Contracts on the shedding candidate backside out to zero.
As it’s a buying and selling market, customers can frequently purchase and promote as costs change. They don’t have to carry contracts till the election is determined.
Are the Markets Correct?
Most of these markets have tended to do job predicting the outcomes of public occasions, although this election cycle, they’ve been extra controversial.
Most public polls present a good race and most nationwide polls have Vice President Harris forward. Due to the US’s oddball electoral faculty system, nationwide polls don’t essentially imply something, however regardless, Harris does lead in most.
On Polymarket, PredictIt, and Kalshi, nonetheless, former President Donald Trump has a considerable lead.
Polymarket has Trump at $0.66 to Harris’ $0.34, on PredictIt it’s $0.60 to $0.46, and Kalshi’s market is at present $0.62 to $0.38 in favor of Trump.
Polymarket has confirmed {that a} single person in France has spent thousands and thousands upon thousands and thousands of {dollars} unfold throughout 4 accounts betting on Trump, which might have skewed the market.
There are additionally those that consider that the demographics skew extra Republican on these websites and thus tilt the market in the direction of Donald Trump.
Sources
https://newsroom.aboutrobinhood.com/introducing-the-presidential-election-market/
https://www.cnbc.com/2024/10/28/robinhood-jumps-into-election-trading-giving-users-chance-to-buy-harris-or-trump-contracts.html
https://www.onlineunitedstatescasinos.com/information/kalshi-wins-appeal-ban-political-contracts-409567/
https://initiatives.fivethirtyeight.com/polls/president-general/2024/nationwide/
https://www.predictit.org/markets/element/7456/Who-will-win-the-2024-US-presidential-election
https://polymarket.com/occasion/presidential-election-winner-2024?tid=1730147674643
https://kalshi.com/markets/pres/presidential-elections
