Incentive Coupon

Open Account

An incentive coupon is a payment made to holders of event contract positions derived from the earnings on the collateral backing those positions. Because a fully collateralized market holds cash against every open contract, that cash can be invested, and ForecastEx passes the resulting earnings back to members, accrued daily against the dynamic market price of the contract and paid monthly. The rate moves with short-term interest rates, and it can form a meaningful part of the total expected return on a position held for an extended period, particularly for low-probability contracts held on the NO side.

Bundling “NO” Hurricane Landfall Forecast Contracts to Reduce Downside Risk

Disaster Insurance Applications of Forecast Contracts

How Forecast Contracts Can Help Mitigate Florida’s Insurance Crisis

Hurricane Forecast Contracts as a Diversifying Asset in an Investment Portfolio

The Value of Climate Prediction Markets