Robinhood is Set to Roll Out Prediction Markets Hub, Stock Up 7.1%

Core Insights - Robinhood Derivatives, LLC is launching a prediction markets hub within the Robinhood app, enabling customers to trade on outcomes of major global events, including the Federal Reserve funds rate in May [1] - Following this announcement, Robinhood's shares increased by 7.1% in the trading session [1] - The prediction markets hub will initially be available in the U.S. through KalshiEX LLC, a regulated exchange [2] Company Developments - The prediction markets hub aligns with Robinhood's goal to become a full-service financial firm and compete with leading derivatives brokers [5] - Event contracts gained popularity after their launch in October 2024, with over 500 million contracts traded within a week [3] - Robinhood's shares have surged 84.2% over the past six months, significantly outperforming the industry's 11% growth [5] Competitive Landscape - Interactive Brokers Group, Inc. has also expanded its event contract offerings to meet rising demand, starting with U.S. election results in October 2024 [4] - Both companies are capitalizing on the growing interest in prediction markets, which allow traders to bet on various outcomes across different sectors [4]