Robinhood Prediction Markets: How They Work, Fees and Payouts

TL;DR

• Robinhood prediction markets are Yes or No event contracts that settle at $1 if you are right and $0 if you are wrong, priced from $0.01 to $0.99. You trade them in the Robinhood mobile app after applying for a Robinhood Derivatives account.
• Fees have two parts. Robinhood's commission is 10% (5% with Gold) times the price times one minus the price, rounded up to the cent and capped at $0.01 per contract, plus an exchange fee of up to $0.01 per contract.
• Payouts are not instant. Most sports contracts settle within 1 to 2 business days, elections can take much longer, and cash takes about one more business day to withdraw.
• Robinhood does not send a 1099 for event contract trades, so you report them yourself. Compare any Robinhood price with prediction market data from other platforms before you rely on it.

Wondering how Robinhood prediction markets actually work before you tap Yes or No? The short version: you apply for a Robinhood Derivatives account in the app, buy a contract that pays $1 if you are right, and sell it before it expires if you want out early.

This guide goes through who can trade, how an order works, what it costs, when payouts land and how taxes are handled, using Robinhood's own help center for every figure.

How Do Robinhood Prediction Markets Work?

Robinhood offers event contracts, which let you take a position on whether a specific outcome will happen. You buy Yes if you expect it to occur and No if you do not. A correct contract settles at $1 and an incorrect one at $0.

Prices run from $0.01 to $0.99 and reflect the market's implied probability, so a $0.65 price implies roughly a 65% chance. You can buy and sell before expiration at the current market price. Categories include sports, politics, weather, commodities and entertainment.

Robinhood describes these as speculation in prediction markets, not wagers against a house. The contracts are offered by Robinhood Derivatives, LLC through one of several exchanges. Robinhood's disclosures name KalshiEX LLC, ForecastEX LLC, Rothera Exchange and Clearing LLC and North American Derivatives Exchange, Inc., and which one applies depends on the contract. Our guide to US-regulated exchanges covers how that setup fits together.

Who Can Trade Robinhood Prediction Markets?

You need to be 18 or older, hold an individual brokerage account and live in the United States. To start, search for Prediction markets in the app, open a contract, tap Yes or No and complete the flow to apply for a Robinhood Derivatives account.

State rules apply. Robinhood says Maryland and Nevada residents cannot trade sports event contracts, and Michigan residents cannot open new sports event contracts as of September 9, 2026. It adds that more restrictions may apply and that some contracts are not available in every state, so check the app's current list.

Trading happens only in the Robinhood mobile app. The web version is view-only, and event contracts are not available on Robinhood Legend. Our comparison of KYC requirements shows how identity checks work across the five platforms PredictionHero tracks.

How Do You Place a Trade on Robinhood Prediction Markets?

Open the event's detail page and select the contract, then choose to size the order in Contracts or in Dollars. Event contracts use limit orders only, so you pick one of two types.

An IOC order fills right away or cancels, at the natural price. A GTD order stays open until it fills or until 3 AM ET the next calendar day, and you can adjust the limit price. Dollar orders are always IOC. Opening orders are whole contracts only.

To sell before expiration, go to Investing, then Prediction markets, then Your positions, select the position and choose Close position. Your proceeds depend on the contract's current price, not the $1 face value. Profit or loss is your proceeds minus your total cost, including fees.

What Are Robinhood Prediction Market Fees?

Robinhood prediction market fees have two parts: Robinhood's commission and an exchange fee. Since June 1, 2026 the commission uses a probability-weighted formula: a constant times the price times one minus the price times the number of contracts.

The constant is 10% without Robinhood Gold and 5% with Gold, which costs $5 a month. Commissions are rounded up to the nearest cent, capped at $0.01 per contract, and highest near a $0.50 price and lowest near $0 or $1.

The exchange fee is separate. It is up to $0.01 per contract, varies by exchange and applies to opening and closing trades.

Robinhood's own example makes it concrete. Buy 100 Yes contracts at $0.90 with a $0.01 per-contract exchange fee, and the commission is $0.45 with Gold or $0.90 without. The total cost is $91.45 with Gold or $91.90 without. For how those costs compare with other platforms, see our fee comparison.

How Do Robinhood Prediction Market Payouts Work?

A correct contract pays $1 and an incorrect one pays $0, but the cash does not arrive the moment the event ends. Settlement waits until the outcome is officially verified.

For sports, Robinhood says most payouts are available within 1 to 2 business days. Elections can take much longer. Some short crypto contracts pay faster, and one contract page lists payout usually within an hour of resolution.

After settlement, winning proceeds move to your event contract buying power, and Robinhood says it takes about one more business day before you can withdraw them or use them for other trades. Holidays and weekends can add time. Our guide to resolution time explains why settlement can lag the final whistle.

Funding works the other way. Event contract buying power is separate from your brokerage account. You add money by bank transfer, which usually takes 1 to 5 business days, by debit card or by wire, and instant deposits are not available for event contracts.

How Are Robinhood Prediction Market Profits Taxed?

Robinhood does not provide a 1099 for event contract trades, and it says taxes on them are your sole responsibility, including reporting on your personal return. It issues an annual statement instead, typically in late January or early February, listing each transaction with its costs, proceeds, fees and net result.

The statement is not a substitute tax reporting form. This is not tax advice, so confirm your own situation with a professional. Our guide to prediction market taxes covers the wider picture.

What Changed Recently With Robinhood Prediction Markets?

Three changes matter for anyone searching for Robinhood prediction markets news. On June 1, 2026 the commission moved from a flat rate to the probability-weighted formula above. On June 4, Robinhood said World Cup winner, spread and total contracts would be routed to Rothera, which it describes as a CFTC-licensed exchange and clearinghouse. On September 9, 2026 Michigan residents lost the ability to open new sports contracts.

Fee schedules, exchanges and state lists have all changed more than once, so check Robinhood's current help center before you trade.

How Does Robinhood Compare With Other Prediction Market Platforms?

Robinhood is a brokerage front end for contracts offered through several exchanges, so the price you see can be compared with the same question elsewhere. Price can differ between Robinhood, Kalshi, and Polymarket and still be a valuable signal.

A gap between platforms is normal, and our piece on why odds disagree explains where it comes from.

Opinion, Limitless and Predict.Fun round out the five platforms PredictionHero tracks, and each runs its own board. PredictionHero lines up prediction market data from all five on one screen, so you can see the spread without opening five apps.

Sources

• Robinhood Help Center. "Event contracts overview." robinhood.com
• Robinhood Help Center. "Trading event contracts." robinhood.com
• Robinhood Help Center. "Event contract settlement." robinhood.com
• Robinhood Help Center. "Buying power and funding for event contracts." robinhood.com
• Robinhood Help Center. "Event contract taxes, reports, and statements." robinhood.com
• Robinhood Newsroom. "The World Cup is Now Trading on Robinhood and Rothera." June 4, 2026. robinhood.com

PredictionHero aggregates publicly available prediction market data for informational purposes only. This is not financial advice. Prediction markets may not be available in all jurisdictions.