Robinhood Will Be First Broker to Offer Cboe Earnings-Linked Prediction Markets

Announced at the company’s third annual HOOD Summit in Houston, Robinhood Markets (NASDAQ: HOOD) will be the first retail broker to offer Cboe Global Markets (BATS: CBOE) event contracts linked to corporate earnings reports and other data points. The Cboe Global Markets logo. The company’s KPI event contracts are expected to debut on Robinhood in October. (Image: PR Newswire) Pending regulatory approval, Cboe said the new derivatives could launch on Robinhood at some point in October, perhaps just in time for the start of third-quarter earnings season. In July, the exchange operator announced it was seeking regulatory approval for binary derivatives tied to 100 key performance indicators (KPIs) of 23 public companies. Cboe says these event contracts differ from comparable fare currently found on prediction markets. “The KPI binary options will provide investors with a new way to take positions on specific company metrics and corporate events through Securities and Exchange Commission (SEC)-regulated products traded on Cboe’s registered U.S. securities exchange,” according to the financial services company. “This proposed framework differentiates Cboe’s products from similar event-based contracts currently traded on designated contract markets (DCMs) and reflects its view that these securities products should be traded within the transparency, oversight and investor protections of the U.S. securities markets, including the benefits of federal preemption of state securities registration requirements.” Companies expected to be featured in the group of 23 include Apple, Coinbase Global, SpaceX, Tesla and Robinhood itself, among others. Cboe, Robinhood Could Refresh Prediction Markets Proposition The HOOD Summit also featured news about Robinhood allowing weekend trading in select equities and exchange-traded funds (ETFs) and plans to provide clients with access to artificial intelligence (AI) trading bots, but the Cboe announcement is important because prediction markets represent the fastest-growing business line in Robinhood history. Much of that growth has been facilitated by clients’ embrace of sports event contracts, but the Cboe KPI derivatives could tap into what brought most customers to Robinhood in the first place: a desire to trade financial markets. The derivatives could catch on with Robinhood clients because these binary contracts provide avenues for trading around “discrete” data points such as Apple iPhone sales, SpaceX rocket or satellite launches or deliveries of specific Tesla models. Conversely, the bulk of corporate event contracts currently available on prediction markets are tied to companies’ stock price fluctuations or corporate actions, including mergers and acquisitions or initial public offering (IPO) filings. Good Timing for Cboe KPI Event Contracts With third-quarter earnings starting in earnest during the second week of October, the Robinhood debut of the Cboe derivatives could prove well-timed. Beyond that, the announcement arrives as prediction markets are expanding their courtship of the professional trading community in an effort to source growth beyond sports event contracts. Both Cboe and Robinhood are waiving fees on the KPI event contracts through the end of this year. The post Robinhood Will Be First Broker to Offer Cboe Earnings-Linked Prediction Markets appeared first on Casino.org.