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Posted August 17, 2026 at 1:12 pm
Tomorrow’s industrial production print is expected to reflect 0.3% month-over-month (m/m) and 1% year-over-year (y/y) increases but the Interactive Brokers Prediction Markets “No” contract with a 1% y/y threshold is priced at only $0.04. This contract is extremely undervalued in my opinion because it would pay $1.00 on a result in-line with expectations, or in other words, on a number less than or equal to 1% y/y. Furthermore, this indicator was a close 1.1% in June and carries an elevated deviation rate, because it’s difficult to predict on a relative basis. Emblematic of the potential for large swings is the monthly Reuters poll of 45 forecasters with estimates ranging from as low as -0.1% m/m to as high at 0.6% m/m. Against this backdrop, the “Nos” at 1.5% and 2% are additionally attractive at $0.77 and $0.86 in my view.
I like the “Yes” contract with a $4.05 threshold for this week’s retail US gasoline prices as it’ll require just a 1.2% week-on-week increase from $4.006 to deliver $1.00 to investors. The $0.35 cost for this contract is cheap, in my view, as pricing of futures for energy reflect a sharper climb of about 6 cents to $4.066 in this indicator. Over and under in the Interactive Brokers Prediction Market, meanwhile, the “Yeses” at $4 and $4.10 are going for $0.95 and $0.03.
Tomorrow’s new residential construction report will offer results on building permits and housing starts. Against this backdrop, I believe there are two potentially undervalued opportunities in the Interactive Brokers Prediction Markets tied to these releases. The “Yeses” at 1.35 million and 1.2 million seasonally adjusted annualized units are cheap at $0.69 and $0.78 in my view because they’ve only been breached once in the last 5 and a half years. Additionally, the economist consensus estimates are well above those levels, at 1.37 million and 1.35 million.
Source for images: Interactive Brokers Prediction Markets.
Note: Prices are highest bids as of the morning of August 17, 2026.
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