- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Posted October 27, 2025 at 10:18 am
Dive into the world of prediction markets with Wall Street South as we break down forecast contracts, from S&P 500 bets to Bitcoin surprises and political futures. Learn how savvy investors are navigating volatility, AI-driven trends, and election odds to uncover hidden opportunities.
The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.
Hello everyone, and welcome to this edition of the Interactive Brokers IBKR Podcast. I’m Jose Torres, your Senior Economist, and today we’re going to be talking about forecast contract picks. If you listened to our earnings call for the third quarter, you know that forecast contracts have been a significant growth driver here at the firm. We currently have 8,232 open instruments listed—up 27% from 6,480 at the end of June. Volumes have increased significantly, up 165% from last quarter, as more investors realize the opportunity these contracts represent. Today, I’m joined by a group of special investors who also happen to be personal friends of mine. From the Wall Street South networking group, we have the founders of the Wall Street South Group: Adam Lorraine and Douglas DeRosa. You can see both of them on one camera—they’re together. We also have Vince Zo here. Vince, Adam, Doug—hello.
Hey Jose, thanks for having me.
Hey Jose, thank you for having us.
Absolutely. Some quick bios: Vince is the founder and Chief Market Strategist at Viewright Advisors. Adam is co-founder of Wall Street South, of course, but he’s also the CEO at Dynamic Capital Holdings. Douglas is the co-founder at Evolv Digital Group. Today, this is our first effort—we’re going to be talking about forecast picks. A lot of our audience has seen them in articles and on social media, where some of our employees—mostly me—share opinions on which forecast contracts look attractive. We have a wide variety of selections, spanning from elections to financial market indices to government actions like the government shutdown, economic indicators, climate, and more.
Today is October 22nd, and we’re seeing some volatility in markets. I’m still bullish on the S&P 500. The forecast contracts I like are for December 31st—I like the “Yes” contracts across those specific thresholds. I want to go to Vince now so he can share something he may like.
Yeah, thanks Jose. I think this is a really cool idea you guys have. I publish equity market research, analyzing cycles and specifically market breadth to help portfolio managers better understand exposure, risk, and reward. So this is really up my alley, and that’s why I’m going to stick to the equity side for my part of the discussion. I’m going to focus on the S&P 500 and the NASDAQ 100 contracts. I looked at the S&P 500—we’re currently around 6,700, down a little bit today. I’m looking at the December contracts, like you, on the “Yes” side. The 7,000 level, to me, represents pretty decent value, with a 35% probability according to what you guys have on your screen right now. Then there’s the 7,200, which is interesting too, but the probability drops sharply to 13%.
I think this aligns with how we view the cycle right now. The advance, which we think began in October of 2022, was only partially refreshed with the correction earlier this year. That would mean we’re in the later innings of the cycle. So it’s hard to expect a really explosive move up to that 7,200 level with so little time left in the year. But the 7,000 level makes sense—it’s a nice round number for people and for technicians. We know that the algos like those round numbers too, and the market has been incredibly resilient. From a near-term perspective, I’d say there are some signs of caution. We’ve seen some disconnects in breadth since about mid-September. But it doesn’t look like a derailment of the cycle—just a pullback, and then I think we rally into the end of the year. For the NASDAQ 100, currently around 23,000, I’d look at the December “Yes” contract at 26,400, which is priced at 31% right now. That, to me, is decent value and fits the same theme. We’ve seen a lot of resilience and tech leadership. It still looks like something with reasonable upside into the end of the year. So I think those are interesting. Again, I expect some choppiness in the near term, but that’ll probably heal up those divergences and then take us off through the end of the year.
Terrific, Vince. Thanks. How about Doug? What do you think?
Well, I’m the person here who is not a market prognosticator or forecaster. So I was looking at it through the lens of political futures and our networking group. Probably 60% of our members have moved to South Florida post-COVID. Some of the reasons are SALT tax and other financially driven factors. I was fascinated with the futures for the gubernatorial races in New Jersey and Virginia, and the mayoral race. They’re almost 90/10 in favor of the Democratic nominee. That was fascinating. Obviously, those are Democratic strongholds, but it was interesting because the view is so polarizing. I think this is a precursor to the midterm elections next year.
We’ll have to see how this plays out. There are concerns in New York City about how that race may go, and we would certainly be the beneficiaries of that in South Florida with new people moving down. If one takes the view that the current presidency is doing all the right moves and that it should be a Republican landslide going forward, given all the positive sentiment and news, it’s interesting because everything in this election—based on the results I’m seeing from your audience—is quite the opposite. It’s very pro-Democrat. It’s not a 50/50 balance—it’s almost a proverbial landslide. So it’ll be interesting to see how those elections play out, and through the lens of South Florida, how that plays out down here.
Yeah, Doug. And for those folks who think one side is undervalued—that the Republicans really do have a better chance—let’s say it’s 10%, 20%, or 30%, that does turn into a dollar if the underdogs are correct. So for the audience: if you think the GOP’s odds in a particular election are too low, you can go in there and buy some “Yes” contracts at maybe 15, 20, or 25 cents. If they pull off an upset, you get a dollar back—and you collect interest along the way. That interest shifts in proportion to the value of the contract, as well as shifts in the Fed funds rate. Adam Lorraine, what do you got?
All right, so I looked through all the contracts. The three that I found interesting, which aligns with what I’ve been talking about, were the unemployment rate. I think that will be higher than what’s posted. Not going to spend a lot of time going into it—it’s obviously AI-driven and partially what you’re seeing now with the markets today, right? You see Texas Instruments, which is everything other than AI—complete slowdown in everything: military, manufacturing, autos. You’re seeing it in Netflix as well—margins compressed by 20%. They missed EPS by a dollar. Maybe it’s specific to them, I’m not sure. Also, the Bitcoin trade. My work has Bitcoin going to 90,000 at a minimum. And we were just talking about it earlier—I think there are some real use case questions on Bitcoin. That doesn’t mean Ethereum, Solana, Tether, and some of the others that have functional use cases won’t still be around—they’ll be good. But I think Bitcoin is vulnerable, just technically and quantitatively. If you look at a monthly perspective—and I’ve posted it—a move to 90,000 would not break the overall macro trend structure. But it would be pretty devastating from a short-term perspective.
And then the last one we were just talking about is the nuclear one. The AI buildout is all based on the idea that trillions are going to be spent, and nobody really spends a lot of time talking about the energy and power consumption that’s going to be needed. In fact, if you look at all the AI buildout talk, these trillions of dollars would require 73 nuclear plants to power those data centers. The fact is, there’s not one—not a single nuclear power plant—being built right now. Even if you started one today, it would take about 10 years to complete. So if you want to throw some cold water on this, nobody wants to talk about the other side of it. But the reality is, there are some real issues there when it comes to powering AI. I’m not saying it’s a pipe dream—I think it’s real, and there’s substantive value there—but we are at a pivot point in the cycle where I think we could see some dislocation in these markets. The S&P 500, since it’s such a behemoth and a store of value—other than the 10 stocks that really run it—all the rest are basically zombie stocks. Those stocks aren’t going to go down a whole lot, and they’re probably not going to go up a whole lot. So to really move the needle, you’d have to get a disruption in the AI supply chain and that circular framework we’ve talked about.
So those are the three I saw on the sheet that I thought were really good:
So those are the three I picked out of all of them.
Yeah, the Bitcoin year-end $95,000 threshold—the “No” is at 21 cents. So for those folks who are bearish on Bitcoin and perhaps agree with Adam in his analysis, you might want to go into the year-end $95,000 “No” at 21%. If Bitcoin does drop to 95,000, that 21% will go up to roughly 50%. If you have conviction and want to stay in the trade, you can stay until expiration and it’ll pay out a dollar. Or you can get out at the money equivalent in forecast contracts and exit around 50%, which would be two and a half times your initial stake. If you’re bullish on Bitcoin and think that by year-end it can exceed 145,000, the “Yes” is at 15 cents at the moment. Before we go—we’re going to keep these short, folks, and we’ll be doing these every few weeks—but before we finish up, I just want to go around with a little surprise forecast contract. Tell me “Yes” or “No.” Vince, I’ll start with you: New York City Mayor Zoran Ani, 91% “Yes.” Are you on the “Yes” side or the “No” side?
I’m on the “No” side. I think that’s interesting—I’ll take that. I think there’s value there.
Yeah, you know they say that if Sliwa drops out, Cuomo’s odds would jump up significantly. So for those folks, there could be value on the other side at around 9 cents—that could become 20 or 30 cents before the election in about 15 days. Adam, what do you think on the Bitcoin contract? I know you say it’s going to 90,000—do you think there’s value at 85,000 “No” for year-end at 11 cents?
That’s tough. I wouldn’t take that bet, only because 90 is the number I’m targeting. So I probably wouldn’t take that unless you saw some sort of crack in my thesis. Whether it’s meaningful or not, my view is that this surge in quantum computing—it’s not a question of if quantum breaks Bitcoin, it’s a question of when. That’ll always be an overhang going forward. Bitcoin investors will have to sleep at night wondering if this is the morning they wake up and Google says they’ve cracked the code with their quantum chip—and then it gaps open at a thousand dollars. But not to get bogged down in it—I wouldn’t take that one.
Okay, Doug. Gasoline prices have been down sharply, partly due to significant oil production from the Trump administration, deregulation, and more incentives to drill. As of the week ending October 19th, gasoline prices were $3.02 on average across the country. Do you think by year-end it’ll be above $3 at 66 cents or below at 34 cents?
Adam is saying below. I’ll say it depends on where you sit with the recession, right? We’ve been kicking this recession idea around. Employment gains have been slow, so where do we sit with that lens? Not to be political, but I don’t see a lot of “drill, baby drill” going on currently. I think the market has pretty much held firm for the last year. So I would probably say it trades a little bit lower from here, but not aggressively lower. The macro environment will determine that. I’ll go back to Vince’s question though—I’d like to answer that. I think, again, this is not taking a certain side, but the biggest crisis our country faces is affordable housing. It’s in South Florida, it’s in New York City. And I really think that’s what voters will be voting on—affordability. That is a large component of people’s income in New York City and South Florida. It’s something that, as an agenda politically, we need to tackle as a country because it’s squeezing a lot of people margin-wise each month. So I think that’s probably the main reason why people will vote for Malani. There you go—I took a stand there.
And you know what—we’ll save this for next time, but I may ask you about housing starts and building permits, construction levels, if those are going to rise. I’ll stay with you, Doug, for our last question because you’ve been liking the election themes. For the midterms, the Democrats are at 56% for the House in terms of having a majority, and the Republicans are at 73% for the Senate. So just to reiterate, folks: there’s a 56% chance the Democrats return as the majority party in the House, and a 73% chance the Republicans maintain control of the Senate. What do you like there, Doug—first in the House and then in the Senate?
Sure. Personally, I’m a big proponent of national security. I think as a country, if you’re not secure and safe, you can’t coexist or exist globally or domestically. So I think that really is—and that’s obviously a strong Republican footprint and thesis that Republicans live by. But with that said, I don’t know if that’s resonating with voters, given what I said earlier about those three elections currently. So I do think there’s a great chance the Republicans probably lose a lot of ground in the midterms. I think the economic challenges people are facing—I still don’t see costs going down significantly. My Jersey Mike’s sub is still offensively expensive. Jersey Mike’s—don’t take that personally, I love your product! But I just think things are not as inexpensive as they were six months ago, and people will vote with their wallets. A year from now, people will say, “You know what? I like where we’re going from a national security perspective, but I don’t know if it’s really bettering me from my personal spending or checkbook.” And I think people will probably vote more based on their personal economics. And I just don’t think those are really going in favor of a lot of people.
So, an interesting thing there, Doug—and a trade I’d like to point out: if you buy the “Yes” for the Democrats in the House at 56 cents and the “Yes” for the Democrats in the Senate at 27 cents, as long as they win one or the other, you’ll still make a dollar back—56 plus 27. But if they take control of both chambers, then you would get $2 back. So for those folks who think the Democrats are going to have a strong showing in the midterms, that could be a potential trade they’d like to take. How about you, Vin? What do you think about the midterm elections? I know you’re more of a stock market and financial market technician, but these prediction markets are broad, and sometimes opportunities arise in areas we’re not necessarily experts in, but we may want to dabble in.
Yeah, I think this one’s tied to inflation, honestly. Like Doug said earlier, people kind of vote on that. If we do see inflation stay sticky and start to see signs of a slowdown, like Adam was pointing to on the jobs front, then that could be a recipe for a surprise loss of the Senate. So I think that trade makes sense to me. Again, not picking sides—I’m totally apolitical—but I think that could make some sense.
Last question to Adam—without the political conversation getting too boring, I’m going to tilt over to Fed rate cuts, if I may. I know Adam likes to talk about that. We’ve had many conversations about the Fed. What are you thinking for October? Pretty much in the bag at 96%. December, though, is only 83% for a 25 basis point reduction. What are your thoughts there in terms of rate cuts into year-end? And the next question I’ll ask after you answer the first one is: what do you think about rate cuts next year?
Sure. I’d say that if I’m correct on my unemployment call—and we’ll have to see how that plays out—then the Fed is going to have to try to counter that with rate cuts, right? On the one hand. And then on the other hand, if inflation stays sticky and costs continue to hang around, then they’re going to be conflicted. But I think at the end of the day, you’re starting to see a little bit of slowdown creeping in. Things aren’t as strong as a lot of people think they are. And I don’t think things are going to fall apart—I just think there’s this digestion period we’re going to have to go through as AI adoption and integration starts to roll out. And also, just from an economic cycle standpoint, we’re kind of due for a little bit of a contraction, even though the Fed doesn’t really allow that to happen because they’re always trying to micromanage it. So to answer your question: yeah, I think they probably should have cut 50 basis points last meeting. So I think the next one’s in the bag, as you said. The December one, even though it’s questionable, I’d say that’s probably in all likelihood. And then—I’m not sure—when is Powell done? March, right?
May, I think.
May, okay. So he’s got a couple more. He wants to protect his legacy—he doesn’t want to go out on a bad note. So he’ll probably fall in line with the market and what the market wants. The market wants rate cuts, Trump wants rate cuts—everybody wants rate cuts. He’s probably behind the curve. So I’d say there are probably two to three more consecutive rate cuts in the bag. Whether that’s good or bad and how that’ll play out with the bond market and the inner workings of that—and whether that’ll actually bring rates down—is another question. But for the foreseeable future, I’d say we’re probably in for three or four rate cuts, especially if the jobs picture continues to be weak.
Yeah. So it sounds like you love the December 2026 unemployment contract at 4.0% “Yes.” That’s only 26 cents. So you just need a modest uptick in unemployment—then that 26 cents becomes a dollar at expiry. Any opinions, Adam, on who’s going to be the next Fed Chair? We have Hassid at 34%, Waller at 19%, and Warsh at 11%.
Probably Waller. Warsh is probably a little too hawkish for Trump. I think they’ve had some good discussions with Waller. It looks like Besson is going to be the guy that makes the recommendation, and then Trump will follow his lead. And to that point, I think that’s one of the reasons Trump has toned down the tariff rhetoric. I think Besson’s got his ear and said, “Look, sir, you can’t be hammering China with tariff talk because the market doesn’t like it.” That’s why he’s been pretty vague about how he’s going to respond to the rare earth hoarding and whether he’s going to have the meeting with GE in a couple of weeks. I guess that’s probably a good thing, but at some point, he’s going to have to address that. We’ll see whether they have the meeting or not and how he addresses the tariffs. The market has that built in at some point—we’re going to have to see what the reaction function is.
Terrific. I wanted to ask Vin about interest rates, but I promised to keep it short, so I’ll ask that question next time. Vince Zo, Doug DeRosa, Adam Lorraine, Wall Street South—thank you all. We’re going to wrap because we’ll all be at the Hilton in West Palm Beach later this evening for a cocktail dinner. I look forward to seeing you all. Thank you very much, Vince.
Thanks, Jose.
Thank you, Jose. Thanks, guys.
Doug, thank you. Adam, thank you. I look forward to seeing you soon, and we’ll do this again next time. Hope you all had fun. Take care, everyone.
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. 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.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers, its affiliates, or its employees.
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.
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!