Interactive Brokers Launches ForecastTrader: Predict Events For Fixed Payouts
Interactive Brokers has launched ForecastTrader, letting users trade Forecast Contracts with yes/no predictions on political races, economic indicators, financial events, and climate trends.
These contracts offer a fixed payout structure and trade 24/6.
Key Takeaways
- Fixed $1 payout per contract for correct predictions
- Trade events like CPI, Fed rate decisions, and state elections
- Zero commissions and a simple pricing structure
- Earn 3.83% APY on the value of held contracts via daily coupon
- $3 bonus credit for new Forecast traders
How Forecast Contracts Work
Each contract pays $1 if correct, with a purchase price ranging from $0.02 to $0.99. Your maximum loss is the price paid, and the maximum gain per contract is $1 minus that cost.
Let’s say you believe the Democratic candidate will win the New York governor primary, and the YES contract costs $0.45. You’ll earn $0.55 profit (excluding fees) if correct, and lose $0.45 if not.
You can buy multiple contracts to increase your exposure.
In some ways, these contracts resemble binary options, i.e. the fixed risk and reward. However, they are being offered by a tightly regulated and transparent provider in Interactive Brokers, which distinguishes them from many unlicensed binary options platforms.
You can also close Forecast Trades early by buying the other side, while binaries usually see you locked in until expiry.
About Interactive Brokers
Established in 1978, Interactive Brokers serves over 2.5 million clients, offering access to 150+ markets in 30+ countries spanning the US, UK, Europe, Asia and beyond.
Interactive Brokers is known for its low-cost structure, powerful software, and access to global markets.
The firm is regulated by top-tier authorities, including the SEC and CFTC in the US, the FCA in the UK, and MAS in Singapore. It is also publicly traded on the NASDAQ.
New traders can sign up and access ForecastTrader with no minimum deposit.
