Brokerage group Robinhood said in a post on social media on Tuesday that over 200m election contracts have been traded on its platform.
The contracts were only launched as a product last week. They give clients the ability to buy a ‘yes’ or ‘no’ contract on whether Donald Trump or Kamala Harris will be made president.
The contracts are somewhat similar to binary options. They are priced between $0.02 to $0.99. If the buyer of the contract is correct, they will be paid $1.00. But if they are wrong then they lose the amount they bought the contract for.
Robinhood charges a $0.01 commission per contract, implying it has made at least $2m in the last week in revenues from commissions alone.
Event contracts were in a legal gray area in the US until the start of October, when they received approval from the US Supreme Court.
Robinhood offers the contracts via a company called ForecastEx. This is owned by Interactive Brokers and operates as a Designated Contract Market in the US.