TLDR
- Robinhood stock surged over 10% after unveiling a deal with Susquehanna International to build a derivatives exchange for prediction markets
- The partnership involves taking a 90% ownership stake in LedgerX, with the deal expected to close in Q1 2026
- Since entering prediction markets through Kalshi in 2024, Robinhood has processed 9 billion contracts from over 1 million traders
- Bernstein projects the platform could reach $300 million in annual revenue from prediction market contracts
- The stock has soared 215% in 2025, making it the S&P 500’s second-best performer this year
Robinhood shares jumped more than 10% on Wednesday after the brokerage announced a strategic move to expand its prediction markets business. The company plans to launch a futures and derivatives exchange with market maker Susquehanna International.
The agreement includes acquiring control of LedgerX, a derivatives platform that was part of the failed FTX crypto empire. Robinhood and Susquehanna will jointly hold 90% of LedgerX, while Miami International Holdings keeps a 10% interest.
Completion of the deal is expected in the first quarter of 2026. The companies did not reveal purchase terms.
Prediction markets allow participants to trade contracts tied to future events. Users can wager on everything from election results to central bank rate decisions. The sector has experienced rapid expansion recently.
Robinhood launched its prediction market offering last year via a partnership with Kalshi. The numbers tell the success story. Users have traded 9 billion contracts since the product debuted. More than 1 million people have participated.
The platform now handles over 50% of all trading volume on Kalshi. This dominance positions Robinhood to capture a larger slice of the revenue pie as the market grows.
Revenue Potential
Bernstein analysts estimate Robinhood is on track to generate north of $300 million annually from event contracts. The investment firm maintains a Buy recommendation with a $160 target price.
The analysts pointed to Robinhood’s 14 million active trader base as a natural fit for prediction markets. This user group already engages in speculative trading activities that align with event betting.
Gautam Chhugani from Bernstein noted the company wants to leverage its distribution advantage. By controlling its own exchange, Robinhood can launch new contracts faster and keep more revenue in-house.
The platform will continue offering Kalshi products while adding proprietary contracts through the new exchange. This dual approach gives traders more options while diversifying Robinhood’s income streams.
Market Momentum
The prediction markets space is attracting serious money from traditional finance. Intercontinental Exchange, which owns the New York Stock Exchange, invested $2 billion in Polymarket last month. Polymarket currently leads the global prediction market industry.
Susquehanna’s role as liquidity provider will be crucial for the exchange’s success. Liquidity providers ensure smooth trading by maintaining buy and sell orders that stabilize prices.
Robinhood emphasized the new exchange will deliver institutional-grade infrastructure to the market. The company said this will create more choices for consumers and allow faster product development.
Shares closed Wednesday at $128.20, representing a $12.63 gain from Tuesday’s close. The stock continued rising in extended trading, adding 0.47% to hit $128.80.
The brokerage has posted a 215% return so far in 2025. This performance makes it the second-biggest winner on the S&P 500 index this year. Robinhood earned inclusion in the benchmark index back in September.
Bernstein expects the company to maintain its Kalshi relationship while building out additional event contracts directly through LedgerX.
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