Robinhood: how it works, fees, and resolution
Event contracts on real-world outcomes, traded inside the Robinhood app through CFTC-regulated partner exchanges.
Official provider profile
Market model
Exchange
Collateral
USD within the existing Robinhood account; no separate crypto wallet needed.
Access
Requires an approved Robinhood Derivatives account; eligibility based on trading experience, investment profile, and state of residence
Topics
Sports, Politics
The beginner version
What does a prediction-market position mean?
A market asks a defined question about a future event. A binary market may offer YES and NO shares; a multi-outcome market can offer several mutually exclusive answers. Traders buy and sell these shares before the market closes. A price such as $0.63 can be read as an approximate 63% market-implied probability, but it is not a promise that the event will happen.
When the event is ready for determination, the provider follows the market’s published source and rules. If one outcome wins, its share may redeem for the stated payout—often $1—while losing shares may become worthless. The exact rules, source, close time, exceptions, fees, and dispute process matter more than a short title.
Read the lifecycle
1. Define
Question, outcomes, close time, source, and edge cases are published.
2. Trade
Orders meet on a book or through a market-making pool; price moves as information and demand change.
3. Resolve
The provider or its oracle follows the stated rules and determines the result.
4. Redeem
Winning outcome shares receive the documented payout; losing shares do not.
Source-backed profile
Fees, settlement, and access
Fees: Probability-weighted commission since June 2026: k * p * (1-p) * contracts, where k is 10% without Gold or 5% with Gold ($5/month). Some contracts add a $0.01 exchange fee or a built-in spread. ACH withdrawals free; instant/debit withdrawals 1.75% ($1 minimum). Source ↗
Resolution: Contracts settle at $1 if the predicted outcome occurs, $0 if not, per the contract's published specifications. Proceeds can take up to two business days to become available for withdrawal. Rules source ↗
Availability: US only. Sports contracts unavailable in some states (reported in Maryland, New Jersey, and Nevada); economic and other categories have broader availability.
Verification and eligibility: Complete identity verification and Robinhood Derivatives approval before trading. Confirm your state's sports-contract availability.
Risks to understand
Event contracts are financial derivatives, not bets, but they can still lose their full purchase price. Fees use a probability-weighted formula that is harder to estimate at a glance than flat per-contract pricing. Availability varies by state and category.
Potential strengths
- Inside the Robinhood app most US investors already use
- CFTC-regulated venues through partner exchanges
- No minimum to open an account; $1 minimum trade
- Gold subscribers pay a lower fee rate
Trade-offs
- Trading is mobile-app only, not on web
- Requires Robinhood Derivatives approval
- Probability-weighted fees are harder to estimate upfront
- Sports availability varies by state
FAQ
Questions beginners ask
How do Robinhood markets work?＋
Robinhood presents a question about a future event and lets users trade one or more possible outcomes. The displayed price can be read as a market-implied probability, not a guaranteed forecast; the market rules define the final result.
How are Robinhood outcomes decided?＋
Contracts settle at $1 if the predicted outcome occurs, $0 if not, per the contract's published specifications. Proceeds can take up to two business days to become available for withdrawal.
What fees does Robinhood charge?＋
Probability-weighted commission since June 2026: k * p * (1-p) * contracts, where k is 10% without Gold or 5% with Gold ($5/month). Some contracts add a $0.01 exchange fee or a built-in spread. ACH withdrawals free; instant/debit withdrawals 1.75% ($1 minimum).
What should beginners check before using Robinhood?＋
Event contracts are financial derivatives, not bets, but they can still lose their full purchase price. Fees use a probability-weighted formula that is harder to estimate at a glance than flat per-contract pricing. Availability varies by state and category. This directory is educational comparison content, not a personal recommendation or betting advice.