Case 1:25-cv-12578-RGS Document 1 Filed 09/15/25 Page 6 of 28
as binary options posing a particular yes-or-no question. A buyer takes the “yes” side and a
seller takes the “no” side, and upon the expiration of the contract—typically, when the outcome
of the future event in question becomes known—the value of the contract goes to the party who
was right.
19.
Until that time, buyers and sellers can trade the contract, and the price of
the contract fluctuates based on the market’s assessment of the probability that the event will
occur. For example, for an event contract worth $1, if the “yes” position is trading at 17 cents
and the “no” position is trading at 83 cents, that implies that the market believes there is a 17%
chance the event will occur. If new information becomes available that indicates that the event is
more likely to occur, market participants’ trading will change in ways that reflect that new
information (for example, more market participants might purchase the “yes” position), which
will cause the price of the “yes” position to go up. Thus, the price of an event contract can reveal
valuable information about market sentiment concerning the underlying event and can therefore
be an important information-gathering tool.
20.
Traders may use event contracts to mitigate risk ( e.g. , an orange grower
may buy a contract predicting an early frost to offset the risk of loss of income from frost
damage) or simply to seek a financial return.
B.
Robinhood Makes Available Certain Kalshi Event Contracts
21.
The companies within the Robinhood organization are financial-services
companies that are democratizing finance by removing barriers to access to financial markets,
including by offering zero-commission stock trading and easy-to-use mobile and web
applications. With their commitment to offering low fees, an intuitive mobile experience and
powerful tools, the Robinhood companies empower everyday investors to navigate financial
markets safely and efficiently. Robinhood is registered with the Commodity Futures Trading
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