Robinhood
shares (NASDAQ: HOOD)
climbed more than 10% yesterday (Wednesday) after the retail brokerage
announced plans to launch its own futures and derivatives exchange. The move signals a deepening
push into prediction markets, which has become the company’s fastest-growing
revenue source.
Until now, the fintech had been expanding its offering through Kalshi, generating more than 50 percent of the platform’s trading volume. By launching its own exchange, Robinhood can list contracts directly instead of relying solely on distributing Kalshi’s products.
Robinhood Shares Jump 11%
on Derivatives Exchange Deal
The
brokerage is partnering with Susquehanna International Group to
acquire a 90% stake in MIAXdx, a derivatives platform previously known as
LedgerX. Miami International Holdings, which currently owns the exchange, will
retain a 10% interest in the venture. Robinhood will control the new entity,
while Susquehanna provides liquidity on day one.
The stock
closed at $128.20, up nearly 11%, making it the top performer in the S&P
500 on Wednesday. Shares have climbed 215% this year, the second-best showing
in the index.
Robinhood’s shares appear to be consolidating near the
all-time highs tested in early October, around 154 dollars. A move back above
the 50-day EMA could give the company room to retest those levels.
Users Bet on Everything
From NFL Games to Fed Decisions
Robinhood
launched prediction market contracts in March through a partnership with
Kalshi, just ahead of the NCAA basketball tournament. Users can now wager on
outcomes ranging from
sports results to Federal Reserve interest rate moves.
More than 9
billion contracts have traded on the platform since launch, with over 1 million customers
participating. The company reported 2.3 billion event contracts
traded in the third quarter alone, more than double the volume in the previous quarter.
“Robinhood
is seeing strong customer demand for prediction markets, and we’re excited to
build on that momentum,” said JB Mackenzie, the company’s general manager
for futures and international.
Street Sees Revenue
Windfall From Betting Boom
Bernstein
analysts estimate Robinhood’s prediction market business is on track to
generate over $300 million in annualized revenue. The firm maintains a Buy
rating with a $160 price target, the highest on Wall Street.
“With
HOOD already accounting for more than 50% of Kalshi market volumes, we believe
HOOD wants to leverage its distribution edge to claim a higher share of the
market revenue pool,” Bernstein analyst Gautam Chhugani wrote on Wednesday.
The new
exchange will allow Robinhood to list and clear contracts directly rather than
rely solely on
its Kalshi partnership. Analysts at Cantor Fitzgerald noted that the CFTC
licenses acquired through MIAXdx will also allow the company to offer
traditional futures and options products.
Rivals Race to Capture
Growing Market
The move
comes as prediction markets attract surging interest from both crypto and
fintech firms. Kalshi
logged $4.47 billion in trading volume over the past month, while rival Polymarket
reported $3.58 billion.
Crypto.com recently
launched its own prediction market and plans to integrate Trump Media, while Gemini has filed for regulatory approval to open a similar marketplace. Reports
suggest that Coinbase is
also exploring an entry into the space.
The
exchange is expected to begin operations in 2026 following completion of the
MIAXdx acquisition. Robinhood plans to make the platform available to other
brokerage firms, not just its own customers.
This article was written by Damian Chmiel at www.financemagnates.com.
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