Robinhood’s Prediction Market Boom Sends Stock Soaring Over 12% in a Single Day

TradingKey - Robinhood (HOOD.US) CEO Vladimir Tenev announced on social platform X that cumulative trading volume on the company’s prediction markets has surpassed 4 billion contracts. This surge in activity propelled Robinhood’s shares up more than 12% on Monday, hitting a new all-time high and extending its year-to-date gains to over 260%.

Robinhood is aggressively expanding into prediction markets, allowing users to trade on high-profile events such as the U.S. presidential election and major sports competitions. The company offers these regulated event-based contracts through a partnership with Kalshi, a platform overseen by the U.S. Commodity Futures Trading Commission (CFTC), ensuring compliance with financial regulations.

Market analysts believe this move not only boosts user engagement and retention but also opens a new revenue stream for the company.

Prediction markets enable users to buy and sell contracts tied to yes-or-no outcomes of future events — such as whether the Federal Reserve will cut rates or which team will win a championship. However, these products have drawn criticism from some in the financial industry, who argue they blur the line between investing and gambling.

Tenev recently added that Robinhood has begun rolling out banking services. Earlier this year, the brokerage announced its entry into traditional banking, offering customers novel perks such as cash delivery to their doorstep.

The recent stock rally was further supported by fundamental tailwinds. Robinhood has officially been added to the S&P 500 index, cementing its status as a major market player. The company now operates under a “dual-engine” model, combining traditional securities trading with its fast-growing prediction market business, creating fresh momentum for long-term growth.