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Robinhood expanded its trading offerings with a new
prediction markets hub to enable users trade on the outcomes of major events.
Initially, traders can speculate on the Federal Reserve’s interest rate
decisions and upcoming college basketball tournaments, the company mentioned.

“We believe in the power of prediction markets and
think they play an important role at the intersection of news, economics,
politics, sports, and culture,” commented JB Mackenzie, VP & GM of Futures
and International at Robinhood. “We’re excited to offer our customers a new way to
participate in prediction markets and look forward to doing so in compliance
with existing regulations.”

New Trading Opportunity for Robinhood Users

According to the announcement, Robinhood Derivatives,
LLC (RHD) has introduced a standalone prediction markets hub within its app.
The feature enables users to engage in event-based trading by purchasing
contracts tied to real-world outcomes.

At launch, the hub will support trades on the upper
bound of the Federal Reserve’s target interest rate for May and the men’s and
women’s College Basketball Tournaments. Robinhood’s prediction markets hub operates through
KalshiEX LLC, a regulated exchange overseen by the Commodity Futures TradingCommission (CFTC).

By introducing this new trading feature, Robinhood now
aims to provide customers with a new way to engage with events that align with
their interests. The company emphasized that prediction markets operate within
a regulated framework, ensuring transparency and liquidity.

The company stated that it has been in close
discussions with the CFTC and intends to maintain compliance while expanding
its offerings. The new feature aligns with Robinhood’s broader mission to make
financial markets more accessible.

Regulatory Compliance

Robinhood’s move into prediction markets underscores a
growing trend where financial platforms integrate real-world events into
trading strategies.

While the initial offerings focus on interest rates
and sports, the firm expects to expand into elections, corporate earnings, and
geopolitical developments.

The prediction markets hub is rolling out now and will
reportedly be available to all eligible users across the U.S. in the coming
days. Last month, Robinhood suspended Super Bowl event contracts
only a day after listing them, reportedly following a request from the CFTC.

Amid the growing popularity of sports betting, the CFTC lost its court case with Kalshi last year over its offering of political event
contracts. These contracts allowed multiple US platforms to offer event
contracts on the outcome of US Presidential elections. However, the watchdog
appealed the decision.

This article was written by Jared Kirui at www.financemagnates.com.

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