Why Trade Stocks on Prediction Markets When the Stock Market Already Exists?
Updated September 30, 2026
Updated September 30, 2026
At first glance, stock-related prediction markets sound unnecessary. If you think Nvidia is going up, why not just buy Nvidia?
That question is becoming more relevant as Polymarket, Kalshi and Robinhood move deeper into company earnings, stock-linked markets and other financial products.
If you buy Tesla shares, you are buying exposure to everything that affects Tesla: deliveries, earnings, interest rates, competition and investor sentiment.
A prediction market can narrow that down to one question:
Will Tesla deliver more than a certain number of vehicles this quarter?
That lets a trader express a specific view without owning or shorting Tesla stock. The same idea can apply to Nvidia revenue, Apple product launches or whether a company beats an earnings target.
But there is a point where the difference starts to disappear. A market on Tesla deliveries feels very different from owning Tesla shares. A market on whether Tesla stock closes above $500 looks much more like a normal financial derivative.
Editor's notes
“Say you own Nvidia stock but you’re worried the company will miss its next revenue target. You might not want to sell the shares or bet against the whole company. A prediction market could let you trade that one outcome instead and even use it as a small hedge against the risk you’re worried about. That’s where the appeal starts to make sense”
Traditional Stock Trade | Prediction Market | |
|---|---|---|
Example | Buy Nvidia shares | Trade whether Nvidia beats a revenue target |
Exposure | The whole company | One specific outcome |
What moves it | Earnings, valuation, sentiment, rates and more | The probability of one event happening |
End result | You continue owning the shares until you sell | The contract resolves Yes or No |
Possible use | Invest in or trade the company | Trade a specific view or potentially hedge a risk |
More than $220 million has been traded across roughly 31,000 equity-linked markets on Polymarket International since individual-stock markets launched there in October 2025, according to blockchain data analyzed by Allium for Reuters. Nvidia, Alphabet, Apple and Tesla have been among the most popular companies.
But remember, there’s a difference between Polymarket International and Polymarket US. The international platform offers direct stock-linked markets, while the regulated U.S. exchange currently sticks to company-related event markets rather than direct individual-stock price contracts.
Kalshi is also moving closer to traditional finance. In September, it filed new rules covering perpetual security futures tied to individual stocks, which would give traders direct exposure to share prices without a fixed expiration date.
Robinhood announced on September 29 that it plans to launch earnings contracts inside its prediction-markets hub, allowing customers to trade on company-specific metrics such as earnings and revenue.
That means a user could potentially own Apple stock, trade Apple options and take a prediction-market position on Apple earnings inside the same app.
For traders, that is convenient. For regulators, it raises the obvious question: when does a prediction market become a stock product?
The SEC already regulates securities and many products tied directly to individual companies, while the CFTC oversees futures and other derivatives.
Prediction markets sit awkwardly between those worlds. A contract on whether Apple launches a product looks like an event market. A contract on whether Apple beats revenue expectations gets closer to financial performance. A contract on whether Apple shares finish above $300 gets closer still to a traditional stock derivative.
The SEC and CFTC are already asking for feedback on how newer event-based products should fit within existing derivatives rules.
That is really the whole issue: prediction markets can give traders a cleaner way to trade one specific company event, but the closer those contracts get to the actual stock price, the harder they become to separate from traditional financial products.
