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Posted November 5, 2025 at 1:11 pm
Our forecast contract volumes rose to a fresh year-to-date high of 12.68 million during yesterday’s elections as investors rushed to place orders ahead of races being called. Transactions are more muted today at around 7 million following the announced winners, which our prediction market reflected elevated odds for, essentially calling the results days before. Indeed, this modern market mechanism is successfully doing its job in signaling the victors prior to the known results, in similar fashion as the Presidential Election of 2024. Our odds signaled overwhelming success for the democratic party in the 2025 elections and that’s exactly what happened. And while anecdotal evidence pointed to Cuomo potentially puling an upset due to the demographics of early voters, or a narrowing lead where Ciattarelli may have been New Jersey’s next governor surfaced, our chances remained heavily in support of the favorites. Looking forward, however, last night’s performance and the passing of Proposition 50 in California raised the likelihood of a flip in the majority control of the House; the probability is up to 69% from 58% just a few hours ago.
With Mamdani capturing 50.4% of the votes, Cuomo 41.6% and Sliwa 7.1%, there’s no denying that if the GOP candidate would have dropped out, the former state governor would have had a much better shot at winning. The 1.7% differential (50.4 – 41.6 – 7.1) could have been covered by a united front against the Democratic Party candidate and increased participation driven by better perceived odds of victory.
As voters flocked to the polls in the New York City mayoral race yesterday, election commentators began to opine alongside anecdotal evidence that former governor Andrew Cuomo’s chances of a surprise victory over frontrunner Zohran Mamdani were improving, a result of a strong early turnout by elderly Democrats that tend to have a much more moderate profile. The IBKR ForecastTrader prediction market, however, continued to show that Mamdani, a Democratic Socialist, was strongly favored to win, with his chances dropping to a low of 87% yesterday. The results, along with the accurate ForecastTrader predictions of gubernatorial victories in New Jersey and Virginia by Democrats Mikie Sherrill and Abigail Spanberger, illustrate how the IBKR ForecastTrader platform can be a powerful tool for assessing election outcomes. As of yesterday, ForecastTrader had placed 82% and 97% chances that Sherrill and Spanberger would succeed, alongside a 98% chance that Proposition 50 would pass in California.
The power of the IBKR ForecastTrader as a predictive market isn’t limited to elections. Since the platform’s launch in August 2024, it has frequently priced the possibilities of outcomes related to economic data, capital market performance, fiscal policy decisions, Federal Reserve actions and environment developments accurately.
The Dallas Fed’s Weekly Economic Index is likely to remain range bound tomorrow as recent indicators don’t point to a significant acceleration or deceleration in activity. The risk-reward profiles of the “Yeses” at 1.4%, 1.6% and 1.8% appear attractive at $0.96, $0.92 and $0.84, and the same is true, in my opinion, for the “Nos” at 2.6% and 2.8%, which are priced at $0.92 and $0.96. The five thresholds have only been breached a handful of times this year as you can see from the chart below. A 0.2% weekly drop or a 0.61% climb is required for this combination trade to lose money, which is an extremely narrow path in my view.
The Bank of Mexico (Banxico) is expected to reduce its benchmark rate by 25 basis points at its upcoming meeting with a 90% degree of confidence. The other option on the table is to keep the level steady, while hiking or a deeper cut is off the board.
Source for images: ForecastEx
Note: Prices are highest bids as of the morning of Nov. 5, 2025. Red circles around the thresholds were inserted by J. Torres to highlight his preferred “Yes” and “No” answers throughout different levels.
To learn more about ForecastEx, view our Traders’ Academy video here
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This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Interactive Brokers LLC is a CFTC-registered Futures Commission Merchant and a clearing member and affiliate of ForecastEx LLC (“ForecastEx”). ForecastEx is a CFTC-registered Designated Contract Market and Derivatives Clearing Organization. Interactive Brokers LLC provides access to ForecastEx forecast contracts for eligible customers. Interactive Brokers LLC does not make recommendations with respect to any products available on its platform, including those offered by ForecastEx.
Forecast Contracts are only available to eligible clients of Interactive Brokers LLC, Interactive Brokers Canada Inc., Interactive Brokers Hong Kong Limited, Interactive Brokers Ireland Limited and Interactive Brokers Singapore Pte. Ltd. Forecast Contracts on US election results are only available to eligible US residents.
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Displayed outcome information is based on current market sentiment from ForecastEx LLC, an affiliate of IB LLC. Current market sentiment for contracts may be viewed at ForecastEx at https://forecasttrader.interactivebrokers.com/en/home.php. Note: Real-time market sentiment updates are only active during exchange open trading hours. Updates to current market sentiment for overnight activity will be reflected at the open on the next trading day. This information is not intended by IBKR as an opinion or likelihood of a potential outcome.
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