Robinhood's New Index Options & Futures Could Boost Market Share, Analyst Says

Piper Sandler analyst Patrick Moley maintained an Overweight rating on Robinhood Markets, Inc HOOD and raised the firm’s price target to $30 from $27.

The price target represents ~8 times Moley’s new 2026 revenue EPS estimate (up from ~7 times 2026 previously) to reflect the incremental revenue opportunity presented by adding index options & futures.

Last week, Robinhood hosted its first inaugural Robinhood Markets Summit 2024 and introduced several new products to its customer base.

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In addition to the latest web-based trading platform (“Robinhood Legend”), Robinhood Markets reiterated plans to launch index options and futures trading in the coming months and revealed details on pricing.

In index options, Gold subscribers will pay $0.35 per contract, and non-gold subscribers will pay $0.50 per contract. In futures, Gold subscribers will pay $0.50 per contract, and non-gold subscribers will pay $0.75 per contract.

Given these pricing disclosures, the analyst raised his 2025 and 2026 EPS estimates by ~5%.

He increased his 2025 and 2026 EPS estimates by 4 cents each from $0.67 and $0.87 to $0.71 and $0.91.

Moley’s base case for 2025-26 assumes index options are ~10% accretive to Robinhood Markets’ total options volume, futures trading accounts for ~5% of Robinhood Markets’ total DARTs, and Gold customers account for 75% of volumes in both index options and futures trading, as for Moley. This is uncharted territory for Robinhood Markets, which built a brand as the zero-commission online broker for the masses, he added.

The more compelling near-term opportunity for Robinhood Markets could lie with active retail traders on competitor platforms drawn in by Robinhood Markets’ lower prices. Moley noted that these product launches for Robinhood Markets will likely put pricing pressure on the incumbents in both index options and futures trading.

Moley summed up that while Robinhood Markets’ offering might not be as robust as its competitors, the combination of its new web platform, incentive match programs, and lower pricing on popular tools for active retail traders might just be enough to win market share among more sophisticated, active retail traders.

Price Action: HOOD stock is up 0.84% at $27.06 at last check Monday.

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