Robinhood Expands Prediction Markets, Stock Surges 8%

November 26, 2025 at 20:39 UTC

7 min read

Robinhood stock price chart surging after acquisition expands prediction markets, ticker HOOD

Key Points

Robinhood and Susquehanna International Group jointly acquired a 90% stake in MIAXdx, a CFTC-licensed derivatives exchange formerly known as LedgerX, to deepen Robinhood's presence in prediction markets.
The acquisition positions Robinhood to launch its own futures and derivatives exchange and clearinghouse by 2026, allowing internal management of execution and clearing for prediction market contracts.
Robinhood's prediction markets have become its fastest-growing revenue segment, with over 9 billion contracts traded by more than 1 million users since launch, and an estimated annualized revenue run rate exceeding $300 million.
Following the announcement, Robinhood's stock surged approximately 8%, reflecting investor optimism about the company's strategic expansion and potential revenue growth in the prediction markets sector.

Strategic Acquisition to Boost Prediction Market Capabilities

On November 26, 2025, Robinhood Markets, in partnership with Susquehanna International Group (SIG), announced the acquisition of a 90% stake in MIAXdx, a derivatives exchange and clearinghouse licensed by the U.S. Commodity Futures Trading Commission (CFTC). MIAXdx, formerly known as LedgerX, was acquired by Miami International Holdings in 2023 following the bankruptcy of the cryptocurrency exchange FTX. Miami International Holdings will retain a 10% equity stake in the venture. This acquisition is a strategic move by Robinhood to deepen its investment in the prediction markets sector, a rapidly growing niche where users trade contracts based on the outcomes of events such as sports results, economic indicators, and political developments. The joint venture will make Robinhood the controlling partner, granting it direct access to MIAXdx’s institutional-grade infrastructure, including its status as a Designated Contract Market, Derivatives Clearing Organization, and Swap Execution Facility. The transaction is expected to close in the first quarter of 2026, subject to regulatory approvals and customary closing conditions.

Prediction Markets as a Core Growth Engine

Robinhood’s prediction markets have emerged as the company’s fastest-growing product line by revenue since their launch in March 2024 through a partnership with Kalshi, a regulated prediction market platform. Since inception, more than 1 million customers have traded approximately 9 billion contracts on Robinhood’s platform. This segment has generated over $100 million in annualized revenue, with management projecting a potential run rate exceeding $300 million in the future. The acquisition of MIAXdx will enable Robinhood to operate its own futures and derivatives exchange and clearinghouse, allowing the company to manage execution and clearing internally rather than relying on third-party venues. This vertical integration is expected to improve economics, increase product flexibility, and accelerate innovation in contract offerings. Robinhood plans to expand its event contract offerings to include a broader range of political, macroeconomic, and sports markets, which are key drivers for sustaining revenue growth in prediction markets beyond the initial launch phase.

Market Reaction and Analyst Perspectives

Following the announcement of the joint venture and acquisition, Robinhood’s shares surged approximately 8% during Wednesday trading, reaching around $125 per share and moving closer to its all-time high of $153.86 set in September 2025. The stock’s rally reflects investor enthusiasm about Robinhood’s strategic expansion into prediction markets, which is viewed as a significant growth catalyst. Piper Sandler analyst Patrick Moley described the deal as "quite positive," estimating it could boost Robinhood’s prediction market economics by about 45% and help push related revenue past a $300 million annual run rate. Goldman Sachs analyst James Yaro reiterated a Buy rating on the stock with a price target of $175, highlighting that the joint venture would give Robinhood more control over contract listings and liquidity, thereby enhancing market depth and revenue potential. Bernstein analysts noted that Robinhood currently accounts for more than 50% of Kalshi’s market volumes and expects the company to leverage its distribution advantage to capture a larger share of the prediction market revenue pool by supplementing Kalshi’s offerings with its own event contracts.

Robinhood’s Broader Business Performance and Outlook

Robinhood Markets has experienced robust growth in 2025, driven by diversification across multiple product lines including equities, options, crypto, futures, and prediction markets. As of the third quarter of 2025, the company reported 26.8 million funded customers and 27.9 million investment accounts, with total platform assets reaching $333 billion. The company’s revenue for Q3 2025 doubled year-over-year to $1.27 billion, while adjusted EBITDA grew 177% to $742 million. Average revenue per user increased by 82% year-over-year to $191, supporting margin expansion and cash flow growth. Bridgewater Associates notably increased its stake in Robinhood during Q3 2025, purchasing over 800,000 shares, signaling institutional confidence in the company’s growth trajectory. Despite a recent correction from its October highs, Robinhood’s stock remains up over 200% year-to-date. The company’s strategic focus on expanding prediction markets, including the launch of its own futures and derivatives exchange, is expected to further diversify revenue streams and solidify its position in the evolving financial technology landscape.

Competitive Landscape and Industry Context

Robinhood is not alone in targeting the burgeoning prediction markets sector. Other notable players include Kalshi, Polymarket, Cboe Global Markets, and CME Group. Kalshi recently received regulatory approval to offer event contracts tied to U.S. elections and has attracted significant investment, reaching an $11 billion valuation. Polymarket secured CFTC approval to operate a U.S.-intermediated trading platform, positioning itself for expansion. CME Group is partnering with FanDuel to launch a consumer-focused prediction market platform called “FanDuel Predicts,” which will offer contracts on sports and key economic benchmarks. Cboe Global Markets is also developing event-based contracts tied to economic data and financial outcomes. Robinhood’s acquisition of MIAXdx and its existing partnership with Kalshi position it to compete effectively by leveraging its large retail customer base of 14 million active traders and its ability to innovate on product offerings and liquidity provision. The company’s move to internalize exchange and clearing functions is expected to enhance its competitive advantage by enabling faster product development and improved economics.

Options Trading Strategy and Stock Outlook

In addition to its strategic expansion, Robinhood’s stock is attracting interest from options traders. A long-term bull put spread strategy targeting a 37% return over four months has been highlighted as a potential trade. With Robinhood trading around $127 per share, selling a 100-strike put and buying a 95-strike put expiring in March 2026 could generate approximately $135 in premium with a maximum risk of $355. This trade profits if the stock remains above $100 at expiration, with an estimated 80% chance of expiring worthless for the short put. Investor’s Business Daily rates Robinhood highly, with a Composite Rating of 95 out of 99, reflecting strong earnings and relative strength. The stock’s recent price action and analyst endorsements suggest continued investor confidence, supported by the company’s diversified revenue streams and growth initiatives in prediction markets and other financial products.

Key Takeaways

Robinhood’s acquisition of a majority stake in MIAXdx marks a significant step in establishing its own regulated futures and derivatives exchange focused on prediction markets.
Prediction markets have rapidly become Robinhood’s fastest-growing revenue segment, with strong user engagement and substantial contract volume since launch.
The strategic joint venture with Susquehanna International Group enhances liquidity and market-making capabilities, positioning Robinhood for accelerated growth and innovation in event contracts.
Investor response to the announcement was positive, driving an 8% stock price increase and reinforcing confidence in Robinhood’s diversified growth strategy and market expansion.