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Robinhood Markets (HOOD +3%) hits a new 52-week high today after the brokerage platform announced it will roll out presidential election event contracts today. Since sinking to lows in early August alongside the broader markets, HOOD has acted like a rocket, shooting over +70% higher. The company does have Q3 earnings results coming up on October 30 after the close, which could introduce volatility. It is critical to note that the event contracts announced today will not affect Q3 numbers, given its October launch date.

• HOOD's move to offer election betting follows in the footsteps of fellow brokerage firm Interactive Brokers (IBKR), which launched Forecast Contracts earlier this month, allowing users to bet on the outcome of the upcoming presidential election. IBKR has sustained its upward momentum since announcing its election-focused contracts, particularly after noting that it observed substantial demand for the offering less than a week after launch.
• Furthermore, IBKR mentioned during its Q3 earnings call two weeks ago that volume within its ForecastEx business, where political event betting is housed, swelled after the launch of election contracts. Management stated that election contracts are the primary feature resonating with its clientele. Additionally, election contracts are only available to U.S. clients, underpinning substantial upside potential that has yet to be realized through overseas expansion.
• HOOD's event contracts operate similarly. They allow customers to trade on the outcome of specific events, like whether a candidate will win an election. Only a week remains until the U.S. presidential election, and HOOD rolled out its event contracts to a limited number of customers today. Given this, HOOD's event contracts may not spur material growth in Q4.
• Still, HOOD's event contract feature could fuel future growth. The offering will not be exclusive to betting on the outcomes of elections. Instead, HOOD sees event contracts as a tool to engage in real-time decision-making, unlocking a new asset class

While not having any bearing on Q3 numbers scheduled for release this week, HOOD's event contracts offering is another feature that can attract more users. The company recently announced plans to launch futures trading, providing another channel to expand its user base. While a healthy market remains pivotal to HOOD's short-term success, its attention on keeping its platform fresh through its constant updates and new features positions it for long-term success.