Robinhood shares (NASDAQ: HOOD) climbed more than 10% yesterday (Wednesday) after the retail brokerage announced plans to launch its own futures and derivatives exchange. The move signals a deepening push into prediction markets, which has become the company's fastest-growing revenue source.

Until now, the fintech had been expanding its offering through Kalshi, generating more than 50 percent of the platform’s trading volume. By launching its own exchange, Robinhood can list contracts directly instead of relying solely on distributing Kalshi’s products.

Robinhood Shares Jump 11% on Derivatives Exchange Deal

The brokerage is partnering with Susquehanna International Group to acquire a 90% stake in MIAXdx, a derivatives platform previously known as LedgerX. Miami International Holdings, which currently owns the exchange, will retain a 10% interest in the venture. Robinhood will control the new entity, while Susquehanna provides liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term on day one.

The stock closed at $128.20, up nearly 11%, making it the top performer in the S&P 500 on Wednesday. Shares have climbed 215% this year, the second-best showing in the index.

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Robinhood’s shares appear to be consolidating near the all-time highs tested in early October, around 154 dollars. A move back above the 50-day EMA could give the company room to retest those levels.

Users Bet on Everything From NFL Games to Fed Decisions

Robinhood launched prediction market contracts in March through a partnership with Kalshi, just ahead of the NCAA basketball tournament. Users can now wager on outcomes ranging from sports results to Federal Reserve interest rate moves.

More than 9 billion contracts have traded on the platform since launch, with over 1 million customers participating. The company reported 2.3 billion event contracts traded in the third quarter alone, more than double the volume in the previous quarter.

“Robinhood is seeing strong customer demand for prediction markets, and we're excited to build on that momentum,” said JB Mackenzie, the company's general manager for futures and international.

Street Sees Revenue Windfall From Betting Boom

Bernstein analysts estimate Robinhood's prediction market business is on track to generate over $300 million in annualized revenue. The firm maintains a Buy rating with a $160 price target, the highest on Wall Street.

“With HOOD already accounting for more than 50% of Kalshi market volumes, we believe HOOD wants to leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term its distribution edge to claim a higher share of the market revenue pool,” Bernstein analyst Gautam Chhugani wrote on Wednesday.

The new exchange will allow Robinhood to list and clear contracts directly rather than rely solely on its Kalshi partnership. Analysts at Cantor Fitzgerald noted that the CFTC licenses acquired through MIAXdx will also allow the company to offer traditional futures and options products.

Rivals Race to Capture Growing Market

The move comes as prediction markets attract surging interest from both crypto and fintech firms. Kalshi logged $4.47 billion in trading volume over the past month, while rival Polymarket reported $3.58 billion.

Crypto.com recently launched its own prediction market and plans to integrate Trump Media, while Gemini has filed for regulatory approval to open a similar marketplace. Reports suggest that Coinbase is also exploring an entry into the space.

The exchange is expected to begin operations in 2026 following completion of the MIAXdx acquisition. Robinhood plans to make the platform available to other brokerage firms, not just its own customers.