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

Robinhood Derivatives, LLC, a wholly-owned subsidiary of Robinhood Markets, Inc. HOOD, is set to launch a prediction markets hub directly within the Robinhood app, allowing customers to trade on the outcomes of several major global events, including the expected upper limit of the Federal Reserve funds rate in May.In light of this development, Robinhood’s shares surged 7.1% in yesterday’s trading session.Prediction markets function within a regulated framework and leverage the financial market structure to boost liquidity, transparency and price discovery. Initially, the prediction markets hub will be available across the United States through KalshiEX LLC, a Commodity Futures Trading Commission-regulated exchange.Rationale Behind Robinhood’s Prediction Markets Hub LaunchEvent contracts gained traction when Robinhood launched it in October 2024, just before the U.S. Presidential elections. These contracts had an enormous success, with more than 500 million contracts traded within a week of launch.Similarly, Interactive Brokers Group, Inc. IBKR, one of HOOD’s peers, has been actively expanding its event contract offerings in recent months to capitalize on rising demand. IBKR first introduced event contracts in October 2024, starting with the U.S. election results.These contracts allow traders to bet on particular outcomes, providing opportunities to gain from predictions on a range of events including sports, entertainment, politics and the economy. The launch of the prediction markets hub aligns with Robinhood’s objective to become a full-service financial firm and compete with dominant derivatives brokers.JB Mackenzie, vice president & general manager of Futures and International at Robinhood, stated, “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.”HOOD’s Zacks Rank & Price PerformanceHOOD shares have surged 84.2%, outperforming the industry’s 11% growth in the past six months.Image Source: Zacks Investment ResearchCurrently, Robinhood sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Growth Initiatives by Other Finance FirmsLast month, State Street Corp. STT agreed to acquire global custody and related businesses outside of Japan from Mizuho Financial Group, Inc. MFG. These businesses aid the international investments of Mizuho’s Japanese clients.Following the completion of the deal, STT will partner with Mizuho Financial to support its Japanese clients with global custody and related services. Meanwhile, MFG will continue to offer trust and custody services for domestic assets within Japan, capitalizing on its expertise and network.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street Corporation (STT): Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report Mizuho Financial Group, Inc. (MFG): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks