When you’re trading event contracts, it’s essential to have a clear understanding of any fees. These are not standard across market prediction sites, meaning Robinhood fees might differ from any other brand you’ve used previously.
In this guide, we’ll break down all of the fees you might encounter while making picks on Robinhood prediction markets. While you won’t ever have to pay account holding fees or fees for inactive accounts, you will have to pay a flat commission rate per contract when making trades. You may also have to pay fees on deposits and withdrawals.
Robinhood is a prediction market which allows users to make ‘Yes’ or ‘No’ predictions on a range of topics, from sports to politics. So, if the market asks ‘Will the Lakers win their next game?’, you’ll buy the ‘Yes’ or the ‘No’ position.
It’s only possible to use the Robinhood app to make trades at the moment as the desktop site is just for information. If you’ve already got a Robinhood account for stock trading, you’ll find that market predictions are very similar. Even if you’re completely new however, the app is well optimized and easy to negotiate.
Robinhood is a CTFC (Commodity Futures Trading Commission) regulated site which is widely available across the country. Unlike sportsbooks, which build an edge into the odds, Robinhood charges a fee per transaction made up of:
Combined, your fees for opening or closing a contract will equate to $0.02. Remember that this per contract so buying at a price of $0.49 would become $0.51 with these costs. Selling would mean each contract becomes $0.47.
It’s important to build these costs into your calculations when setting your budget. This fee is the same across events, whether you’re making a pick on Robinhood sports markets or diving into financial predictions.
There are no fees to open or maintain a Robinhood account but, in order to make picks, you’ll be required to deposit funds. Robinhood supports various deposit methods but doesn’t accept credit cards or third party e-wallets such as PayPal and Neteller. In the table below, we’ve outlined all of the possible deposit methods and any fees:
| Deposit method | Robinhood fees | Timeframe |
|---|---|---|
| ACH bank transfer | $0 | 3-5 business days |
| Instant bank deposit | $0 | Instant |
| Wire transfer | $0 (but your bank may impose a fee) | 1-2 business days |
| Visa or Mastercard | Maximum 1.75% | Instant |
| Cryptocurrency | $0 | Instant |
The maximum profit possible at Robinhood is the difference between the contract you’re purchasing and $1. Don’t forget that there may be fees attached too. So, for example, let’s say you buy a ‘Yes’ contract at $0.48 with a $0.01 Robinhood commission fee and $0.01 exchange fee per contract, equalling $0.50.
The total possible value of the contract, considering it’s correct of course, is $1. That means each contract has a maximum value of $0.50 ($1-$0.50).
Once the event has taken place, markets settle very fast, usually instantly and proceeds are credited straight to your account. You can use a variety of methods to withdraw your money, each with a different time frame and possible fees.
Standard ACH withdrawals take between one and three business days to reach you, depending on your individual bank. Alternatively, you can opt for instant withdrawals, which are processed in minutes. These attract a 1.75% fee and have set limits — $1 minimum and $150 maximum.
Yes, any money you make on Robinhood event contracts should be reported as part of your annual tax return. If you meet the threshold for tax liability, Robinhood will send you a 1099 form to report this income.
Before you sign up to Robinhood, it’s imperative to understand the fees you’ll encounter for making trades. You won’t have to pay anything for opening an account but you will have to pay a commission and exchange fee on every transaction. One of the great things about Robinhood is that this fee structure is easy to understand and accessible for beginners. Each transaction attracts a flat fee of $0.02 which is simple to build into your budget.
Making deposits and withdrawals at Robinhood is also very straightforward but may attract its own fees. These fees depend on your Robinhood membership, and the method you’re using, but are clearly laid out on the Robinhood site. You can discover Robinhood for yourself right now by hitting our links.
Yes, each transaction incurs a fee at Robinhood but the fee system is totally transparent and straightforward. Every time you buy a contract, you’ll pay both a commission fee and an exchange fee, totalling $0.02. Robinhood doesn’t charge any fees for opening up an account and won’t charge fees if your account is dormant for a period of time.
You might incur a fee to withdraw money from Robinhood, depending on the method chosen. Withdrawals via bank transfer are free unless you opt for the instant route, which attracts a fee of 1.75%.
Sport is one of the most active categories at Robinhood. As well as domestic leagues covering the MLB, NHL, NFL and NBA, there’s a growing number of international sports coming through including soccer. Robinhood election markets are also very popular and increasing in depth and variety.
Loading …
