Tag: HOOD

Can You Predict the Future of Predictive Markets?

by Fred Fuld III

In 2026, the world of prediction markets has moved from the fringes of the internet to the center of global finance.These platforms are essentially information exchanges where users buy and sell contracts on the likelihood of real-world outcomes. If you think a candidate will win an election or a tech giant will hit its earnings target, you buy a “Yes” contract. If the event happens, the contract pays out; if it doesn’t, it expires worthless.

The beauty of these markets is their accuracy. Because participants have “skin in the game,” the price of a contract serves as a real-time, crowd-sourced probability that often outperforms traditional polling and expert analysis.

Here is a breakdown of the primary prediction market platforms available today.

1. Kalshi

The Regulated Heavyweight Kalshi is currently the dominant player in the U.S. market. It operates as a federally regulated exchange overseen by the Commodity Futures Trading Commission (CFTC). This regulation allows it to offer a high degree of trust and seamless integration with U.S. bank accounts.

  • Availability to US Citizens: Fully Available. Kalshi is a U.S.-based company and is legal for residents in most states (though some states like Massachusetts and New Jersey have recently challenged or geofenced specific sports markets).
  • Event Types: Known for “macro” events. You can bet on Federal Reserve interest rate hikes, inflation data, Box Office totals, Rotten Tomatoes scores, and—most famously—elections. In late 2025, they expanded significantly into sports event contracts (e.g., NFL, NBA).

2. Polymarket

The Crypto Giant Polymarket is the world’s largest decentralized prediction market. Built on the Polygon blockchain, it uses the USDC stablecoin for all transactions. After being restricted in the U.S. for several years, it began a regulated comeback via a new legal framework in late 2025.

  • Availability to US Citizens: Limited / Phased Rollout. As of February 2026, Polymarket is returning to the U.S. through a regulated channel. While many U.S. users are still on waitlists, the platform is increasingly accessible compared to its previous “offshore-only” status.
  • Event Types: Unrivaled variety. Polymarket covers everything from global geopolitical conflicts and crypto price movements to pop culture “memes” and scientific breakthroughs. If it’s being talked about on the internet, there is likely a market for it on Polymarket.

3. PredictIt

The Political Laboratory PredictIt is a project of Victoria University of Wellington and serves primarily as an educational and research tool. Because it operates under a “no-action” letter from the CFTC (though this has been the subject of intense legal battles), it has strict limits on how much a single person can invest.

  • Availability to US Citizens: Fully Available. It is specifically designed for the U.S. market, though it has a $3,500 position limit per contract to keep it focused on research rather than institutional speculation.
  • Event Types: Politics only. PredictIt does not offer sports or weather. It focuses exclusively on U.S. elections, Supreme Court rulings, and legislative outcomes.

4. Robinhood (HOOD) & Interactive Brokers (IBKR) [ForecastEx]

The Traditional Entrants In the last year, major traditional brokerages have entered the fray. Robinhood now offers election and event contracts directly in its app, often routing orders through Kalshi’s infrastructure. Interactive Brokers launched ForecastEx, a dedicated exchange for economic and climate-related predictions.

  • Availability to US Citizens: Fully Available. These are standard U.S. financial institutions.
  • Event Types: Mostly focused on “serious” data: Economic indicators (CPI, unemployment), climate data (global temperature averages), and major political milestones.

While prediction markets are powerful forecasting tools, they are not “safe” investments like savings accounts. Because they are binary (paying out either $1 or $0), they carry unique risks that combine the volatility of tech stocks with the “all-or-nothing” nature of sports betting.

As of early 2026, these are the primary risks you face when trading these markets:

1. Regulatory & Legal Risk

The “legal status” of these platforms is a moving target. Even if a platform is federally regulated, state-level challenges remain a major hurdle.

  • State-Level Shutdowns: In early 2026, several states (including New Jersey and Maryland) issued cease-and-desist letters to platforms, claiming they bypass state gambling laws. You could find your account geofenced or restricted with little notice.
  • Tax Uncertainty: The IRS has not yet issued formal guidance on whether prediction market gains are “capital gains” or “gambling winnings.” This could lead to unexpected tax liabilities or penalties if you misreport your earnings.

2. Insider Trading & Information Asymmetry

Unlike the stock market, where insider trading is a strictly enforced crime, prediction markets often rely on insiders to move the price toward the “truth.”

  • The “Whale” Effect: Large traders with deep pockets or non-public information (e.g., a political staffer who knows a bill will fail) can move the price before you have a chance to react.
  • Enforcement Risk: On February 5, 2026, federal prosecutors in New York signaled they would begin charging traders who use “material non-public information” with wire fraud, moving toward a stricter enforcement era.

3. Liquidity & Execution Risk

Liquidity refers to how easily you can enter or exit a trade without significantly changing the price.

  • The “Exit” Problem: In “thin” markets (low volume), you might buy a contract at $0.60, but when you want to sell, the best buyer is only offering $0.50—even if no news has changed.
  • Slippage: If you try to place a large bet on a niche topic (like a specific scientific discovery), your own buy order might push the price from $0.30 to $0.45, instantly destroying your potential profit margin.

4. Platform & Technical Risk

Because many of these platforms use “Web3” or hybrid infrastructure, they face unique technical vulnerabilities.

  • Oracle Failure: A “Yes” or “No” payout depends on an Oracle (the data source that confirms the outcome). If an Oracle is hacked or provides ambiguous data, your funds could be locked in a dispute for months.
  • Account Security: In late 2025, a major breach of a third-party authentication provider highlighted that even if the “blockchain” is safe, the login screen might not be.

5. Manipulation & “Noise”

Prediction markets can be susceptible to intentional distortion.

  • Wash Trading: Some participants may trade back and forth with themselves to create the illusion of high volume and interest.
  • Propaganda Bets: Political campaigns or wealthy donors have been known to place massive bets to make their candidate look more likely to win in the media, creating a “narrative” that isn’t backed by actual data.

Keep these risks in mind before dipping your toe into predictive markets.

Disclosure: Author didn’t own any of the above stocks at the time the article was written. No recommendation are expressed or implied.

Should You Invest in an Online Investment Company? The Three Big Platforms

by Fred Fuld III

There are three main companies that are primarily involved in online trading. Here’s a refined look at Webull (BULL), Robinhood (HOOD), and eToro (ETOR) as investment opportunities—covering what each business does, their strengths and weaknesses, and client metrics including user counts and growth trends.

Webull

Webull, founded in 2016 and headquartered in Florida, is a commission-free platform known for its robust tools aimed at more experienced traders. It supports stocks, options, ETFs, cryptocurrencies, and fractional shares. Its public debut via a SPAC merger in April 2025 under the ticker BULL saw its share price skyrocket by ~500%, signaling strong investor enthusiasm.

As of early 2024, Webull claims around 20 million registered users and reported 4.3 million funded accounts with about $8.2 billion in assets under management. It also operates across multiple global regions—including North America, Asia Pacific, Europe, and South Africa—which positions it for diversified expansion.

The stock has a trailing price to earnings ratio of 8.4. The price to sales ratios very high at 11.5.

Advantages:
Webull stands out with professional-grade charting, advanced order flows, and real-time data—features tailored to active, technically savvy traders. Its global reach is greater than Robinhood’s, and its more sophisticated tools often surpass those of eToro.

Disadvantages:
It attracts fewer casual traders compared to Robinhood and lacks eToro’s social/copy-trading community. It has also faced scrutiny over data security and compliance, including a $3 million FINRA fine in 2023 and US legislative concern due to its Chinese ties.

Robinhood

Robinhood pioneered commission-free trading since its 2015 launch and went public in mid-2021. It offers stocks, ETFs, options, futures, crypto, and banking-like features. Its monetization combines payment for order flow, margin lending, and paid tiers such as the Gold tier, along with interest on uninvested cash.

By February 2025, Robinhood had approximately 25.6 million funded customers—up 2 million year-over-year—with AUC around $187 billion, a 58% yearly increase. As of December 2024, its monthly active users numbered about 14.9 million.

The company has a trailing price to earnings ratio of 41.5 and a forward P/E of 49. The price to sales ratio is extremely high at over 20.

Advantages:
Robinhood continues to lead in U.S. retail user base, boasting brand recognition, simplicity, and a thriving ecosystem enhanced with Gold, investing products, and soon banking and robo-advisory services. Its high average revenue per user shows strong monetization.

Disadvantages:
Its tools are generally less sophisticated than Webull’s. It’s heavily reliant on PFOF, which critics say introduces conflicts. Regulatory scrutiny and past controversies persist. And while its total user base is large, active monthlies dipped slightly in Q1 2025 .

eToro

eToro, founded in 2007 in Israel, combines brokerage and social trading features, allowing users to copy top investors. It offers multi-asset access—stocks, crypto, ETFs, futures—alongside unique social-enabled tools like CopyTrader and thematic Smart Portfolios. Its revenue in 2024 reached about $931 million, with earnings of $192 million.

As of late 2024, it had around 38 million registered users, with 3.5–3.6 million funded (active) accounts, growing 14% year-over-year; assets under administration in Q1 2025 hit about $16.9 billion—a 21% annual increase.

The stock trades at 27 times trailing earnings and 26 times forward earnings. It has a very favorable price to sales ratio of 0.39.

Advantages:
eToro excels at social and copy trading—ideal for beginner and social-centric investors. Its global presence is strong, offering multi-currency support and diverse regional expansions, including recent market penetration in the U.S., Asia, and Latin America .

Disadvantages:
Its funded user base is relatively small compared to Robinhood and Webull. Revenues declined post-pandemic highs, and its nascent U.S. presence lags behind more entrenched competitors. Brokerage fees via spreads—though transparent—can slightly offset its zero-commission messaging.

Head-to-Head Comparison

  • User Depth & Scale: Robinhood leads in funded accounts (~25 M) and active user base, followed by Webull (4.3 M funded, 20 M registered) and then eToro (3.6 M funded, 38 M registered).
  • Geographic Reach: eToro is truly global (140+ countries), Webull also spans multiple continents, while Robinhood is primarily U.S.-centic with growing U.K. and Asia presence.
  • Trading Tools: Webull offers the most advanced tooling, Robinhood is middle-of-the-road with gold-tier features, and eToro focuses on social and copy trading rather than depth.
  • Revenue Models: Robinhood relies on PFOF, margin, and subscriptions; Webull earns via spreads, margin, and potential listing upside; eToro leans on spreads and crypto commissions, though it avoided PFOF.
  • Growth Momentum: Robinhood showed strong year-over-year AUC and user growth; Webull’s IPO pop indicates investor momentum; eToro’s funded accounts growth (~14 % YoY) is modest but steady, though pre-IPO scaling is navigating valuation pressures .

Investment Outlook

Webull offers a compelling bet on disciplined trader growth and tech-forward infrastructure, but faces regulatory and compliance noise. Robinhood remains a dominant U.S. fintech brand with scale and diversified income, though regulatory risks and engagement variants exist. eToro is an attractive global social-trading play, catering to a growing cohort of digitally native investors, but needs to translate that into deeper funded penetration and stable profitability in newer markets.

In summary, your choice among Webull, Robinhood, and eToro depends on which slice of retail investment you want exposure to: Webull for advanced traders and product innovation; Robinhood for scale and monetization in U.S. retail; eToro for global, social-copy trading growth. Each platform offers different investment stories—growth potential, regulatory risk, and market positioning—that are worth tracking as they mature in public markets.

Disclosure: Author didn’t own any of the above at the time the article was written.

If You Own a Slice of a Share, Can You Vote on Shareholder Proposals?

by Fred Fuld III

Many beginning investors, and many investors with a moderate amount of money to invest, choose to buy a slice of a share of stock instead of a whole share or several shares. This is especially true with high priced shares, such as Autozone (AZO) which sells for over $3500 per share, Netflix (NFLX) which trades at about $950 a share, and Costco (COST) which is selling at almost $900 per share. Even the tax software company Intuit (INTU) currently trades at $600 a share.

For someone that only has $500 to $5,000 to invest, this is a big chunk of money to allocate to one stock even if they purchase only one share.

Fortunately, most stock brokerage firms, such as Schwab (SCHW), Fidelity, SoFi (SOFI), and Robinhood (HOOD) allow investors to buy slices of shares. So what is a slice?

A “slice of a share,” also known as a fractional share, is a portion of a whole share of stock, allowing investors to own a piece of a company without having to invest the full price of a single share.
Here’s a more detailed explanation:
What it is:
A fractional share represents a percentage of a whole share, enabling investors to invest smaller amounts of money in companies they’re interested in.
How it works:
If a stock costs $500 per share, an investor could buy a fractional share for, say, $10, representing 2% of a whole share.
Why it’s useful:
Fractional shares can make investing more accessible, especially for beginners or those with smaller budgets, as they allow investors to put their money to work even if they don’t have enough to buy a full share.
Brokerage offerings:
Many brokerages now offer fractional shares, allowing investors to purchase portions of stocks or ETFs.
Charles Schwab:
For example, Charles Schwab refers to fractional shares as “Schwab Stock Slices” and allows investors to buy slices of 30 stocks in companies on the S&P 500 in one transaction.
Fidelity:
Fidelity also offers fractional shares, allowing investors to invest in stocks and ETFs in fractions or dollars.
Dividends and corporate actions:
When you own fractional shares, you’ll still receive dividends and participate in other corporate actions (like stock splits) based on the percentage of a whole share you own.
Shareholder Proposal Voting Rights:
Your ability to exercise voting rights will depend on how your brokerage firm’s fractional share investing program works. However, based on my experience, I was offered the ability to vote on corporate actions and proposals.

My Personal Experience:

I decided to try this out with a popular stock that sells for over $500 per share. I invested an extremely small amount, which gave me ownership of 0.05442 of a share. That’s slightly over 5% of a share, or in other words, about one twentieth of a share.

Just yesterday, I received the request to vote my shares, or should I say, my portion of a share, which I did. There was voting for the board of directors and voting on various shareholder proposals.

This company also offers a couple of benefits to shareholders which I am also entitled to. Such a deal.

This particular stock doesn’t pay a dividend, but if it did, I would be entitled to my share.

So in answer to the question asked in the title of this article, the answer is YES.

Disclosure: Author didn’t own any of the above mentioned stocks at the time the article was written.

How Did the Meme Stocks Do Last Year? Here’s How

by Fred Fuld III

About a week ago, I heard an analyst on CNBC being interviewed about meme stocks, although he didn’t pronounce it “meeem”, he pronounced it “me-me”. Do you think it was accidental, through ignorance, or on purpose with a hidden meaning?

Whatever you call them, the meme stocks have had a wild ride last year. Surprisingly, a few of them performed extremely well, but many ended up dropping over 40% for the year.

Interestingly, the top performers were GameStock, I mean GameStop (GME) (did I type it that way accidentally or on purpose?), up 688%, and AMC Entertainment (AMC), which rose by 1183%.

The memes that tanked the most were Clovis (CLOV) down 78% and ContextLogic Inc. (WISH), which dropped by 83%.

The following is a list of the meme stocks and semi-meme stocks along with the January 1 to December 31 performance for the year 2021.

GME 688%
AMC 1183%
CLOV -78%
CRON -43%
DASH 4%
FVRR -42%
HOOD -49%
IQ -74%
OTLY -61%
WE -27%
WISH -83%
BB 41%
SNDL 22%
BYND -48%
SLV -12%

Maybe we will see some meme action again this year. What do you think?

 

Disclosure: Author owns SLV and HOOD.

Robinhood Investors Getting Rich

by Fred Fuld III

Last Thursday, Robinhood (HOOD) went public at an IPO price of $38 per share. The stock sold off a little that first day, but today, the stock reached a price per share of $85 shortly after the stock market opened.

This works out to a 123% gain in one week. Not too shabby for a recent IPO.

Even if you had waited until yesterday to buy the stock on the close at $48.50, the gain would be 75%.

Robinhood has almost turned into a meme stock, not due to a short squeeze but do to the popularity of the stock, as it has garnered much attention on Reddit.

Options started trading on the stock today, and the volume and activity is huge. The strike prices range from 20 to 95 for all expirations from August to January of next year. Will higher strikes need to be added? Who knows? Maybe even lower strikes.

The August implied volatility is over 200% and September is in excess of 170%.

It will be interesting to see if Robinhood turns into another GameStop (GME) or AMC (AMC), or if it takes you for a RIDE.

 

Disclosure: Author owns two shares of HOOD.