- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Posted December 10, 2025 at 12:48 pm
News that President Trump will begin final interviews with Fed Chair candidates this week moved forecast markets yesterday, as it’s unclear to ForecastTrader participants if he has changed his opinion across potential selections. National Economic Council Director Kevin Hassett is still the heavy favorite at 72%, although he has been trending south. Emblematic of his narrowing lead are odds that were at 80% on Dec. 9 and 90% on Dec. 3. Part of the decrease can be attributed to Hassett stating that he wouldn’t bow to pressure from the White House to reduce rates and would instead rely on his own judgement. But Hassett balanced that declaration by saying that there’s plenty of room to cut, effectively serving dovish remarks signaling a preference for additional accommodation that President Trump would certainly support. Meanwhile, former Fed Governor Kevin Warsh’s likelihood jumped from 9% yesterday to 16% today, since the commander in chief is beginning the talks with him. Prospects amongst the others were relatively flat since there wasn’t a reason to believe that their chances have improved. Governors Christopher Waller and Michelle Bowman remain below 5%, while Treasury Secretary Scott Bessent is at 6%. There are approximately 26k contracts open that are tied to the nomination.
Last week’s reported plunge in initial unemployment claims led to the lowest reading in 38 months, or since September 2022. But although consensus expectations project a 220k in tomorrow’s print, this time of year does typically offer volatility for this specific indicator. The trend in recent periods is that filings are increasingly subdued during the holidays and against that backdrop there are undervalued forecast contract opportunities in my opinion. Indeed, a modest drop from the 191k level to 190k or lower for example, is priced at just 2%, corresponding with the “No” being available $0.02. Meanwhile, the “No” at 200k is going for $0.05 and the “Yes” at 220k is costing $0.09. This combination trade offers a favorable risk-reward profile from my perspective and costs a total of $0.16. It delivers $2.00 to investors on a number at or below 190k, $1.00 back on a figure as low as 191k or as high as 200k and a payout of $1.00 on a result north of 220k with a max loss of only $0.16.
The Dallas Fed’s Weekly Economic Index hasn’t exceeded 2.4% since the week of Oct. 11, but there’s a 20% chance according to our prediction market that it’ll climb above that level in tomorrow’s print. If an acceleration were to occur, that would be great news for growth trends and corporate earnings prospects, especially on the heels of a projected rate cut in the prior day that is poised to add further fuel to the fire. The recent reopening of the government also offers a short-term cyclical tailwind that could motivate “Yes” contract buying here.
Source for images: ForecastEx
Note: Prices are highest bids as of the morning of Dec. 10, 2025. Red circles around the thresholds were inserted by J. Torres to highlight Yes” and “No” answers throughout different levels.
To learn more about ForecastEx, view our Traders’ Academy video here
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
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.
Futures, event contracts and forecast contracts are not suitable for all investors. Before trading these products, please read the CFTC Risk Disclosure. For a copy visit our Warnings and Disclosures Page.
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.
This is commentary on economic, political and/or market conditions within the meaning of CFTC Regulation 1.71, and is not meant provide sufficient information upon which to base a decision to enter into a derivatives transaction.
Related Articles
Join The Conversation
For specific platform feedback and suggestions, please submit it directly to our team using these instructions.
If you have an account-specific question or concern, please reach out to Client Services.
We encourage you to look through our FAQs before posting. Your question may already be covered!