What Are Robinhood Event Contracts? Everything You Need to Know

Robinhood has officially entered the world of prediction markets, adding to its wide range of investing options for customers. Through its Robinhood Derivatives platform, the company now offers event contracts, a new way for retail traders to speculate on real-world outcomes, from Federal Reserve interest rate decisions to the NCAA college basketball tournaments.

These aren't bets in the sportsbook sense. Event contracts are CFTC-regulated financial instruments that allow traders to take a position on whether a specific event will happen. The format is simple: Yes or No. If your prediction is correct, the contract pays out $1. If not, it expires worthless.

Robinhood's event contracts are actually offered through a partnership with Kalshi, a standalone event contracts exchange that offers even lower fees.

Sign up to Kalshi here to trade real money on future events.

How event contracts work on Robinhood

An event contract is based on a binary outcome—something either will or won't happen. The price of each contract fluctuates between $0.01 and $0.99, reflecting the market's implied probability of the outcome. A price of $0.53 suggests a 53% chance that the event will happen, according to current market sentiment.

Traders can only hold one side of a contract at a time. Buying Yes means you believe the event will happen; buying No means you believe it won't. If you want to exit the trade before settlement, you close your position by selling your contracts at the current going price.

Each contract settles at either $1 or $0. If you bought at $0.47 and your prediction was right, you receive $1 at settlement, netting a $0.53 profit before fees. If you're wrong, the contract expires at $0, and you lose your initial stake.

Getting started with Robinhood Derivatives

To trade event contracts on Robinhood, you'll need an approved Robinhood Derivatives account. Eligibility requires that you're a U.S. citizen and have an active investing account with either margin investing enabled or Level 2 or higher options trading approval.

Once approved, you can search "event contract" or find the new prediction markets hub directly within the Robinhood app. From there, select a contract, choose Yes or No based on your outlook, enter the number of contracts you want to purchase, and swipe to submit. Orders are submitted as immediate-or-cancel limit orders, so your trade will only go through if there's a market participant willing to take the opposite side. If no match is found, your order will be canceled or rejected.

Closing a position works the same way—select the contract, choose to close, and confirm the number of contracts you'd like to unwind by purchasing the opposite side.

Timeline, trading hours and payouts

Each event contract comes with its own timeline, displayed on the contract detail page. This timeline shows when the contract becomes available, the last day you can trade it, and the expected payout date. Trading hours can vary but often run from 8 a.m. to 3 a.m. ET, depending on the specific contract.

Once an event resolves, the contract is settled, and eligible proceeds are distributed. It can take up to two business days for those funds to become available for withdrawal. While the payout date reflects when your position is resolved, the timing for funds to move from your Robinhood Derivatives account to your investing account may lag slightly.

Robinhood event contract fees and pricing

Each contract carries a Robinhood commission of $0.01 per contract traded. Some contracts also include an exchange fee of $0.01, while others have a built-in spread instead. If a spread is embedded, you might notice that the Yes and No contract prices add up to slightly more than $1—typically $1.01. This difference accounts for how exchanges generate revenue when fees aren't charged directly.

For example, if you buy a Yes contract at $0.47 and pay $0.01 in both Robinhood and exchange fees, your total cost is $0.49. If the contract settles at $1, you make a $0.51 profit. In a spread-based example, buying at $0.60 plus a $0.01 Robinhood fee gives you a total cost of $0.61, and your max gain is $0.39 if you're correct.

Maximum profit is the difference between your cost basis and the $1 payout. Maximum loss is limited to your upfront investment.

A new way to trade on future outcomes

Robinhood's launch of event contracts offers a low-cost, defined-risk way to speculate on the news and headlines that shape the world. Whether you're predicting Fed decisions, tournament results, or future political developments, these contracts provide a unique method to trade based on conviction rather than simply price movement.

The product is not without its limitations. You must meet eligibility requirements to participate, and not all contracts are available in every state. Liquidity may be lower than traditional equities markets, meaning some orders may fail to execute. Event contracts also can't be traded via stop or limit orders, and Instant Deposits often aren't usable for these trades.

Still, for traders looking for a structured and regulated way to engage with prediction markets, Robinhood's offering creates a new frontier. With contracts priced in cents, outcomes backed by a $1 payout, and a growing range of events to choose from, Robinhood event contracts make it possible to turn your predictions into a trading strategy—all within the app.