Forecast contracts covering initial unemployment claims have been my go-to on Wednesdays recently, because the weekly labor data released on Thursdays have been stuck in a range. Rare surges coupled with a tendency for results to remain above 210,000 compel me to point to the “Yes” answer for the IBKR ForecastTrader Contract asking, “Will US initial jobless claims exceed 210,000 for the week ending April 26, 2025?” and the “No” answer at 250,000 for a total cost of $1.77. In the past 52 weeks, claims have surpassed 250,000 just once and during the past 61 weeks they have been at or below 210,000 only five times. Finally, the consensus expects another number near the 1-year average with the median estimate standing at 224,000 for tomorrow’s 8:30 am ET release. If the result is near the median estimate, exceeding 210,000 but failing to arrive above 250,000, then the trade delivers $2.00 to the investor.
GDP Contracts Present Another Compelling Opportunity
With today’s preliminary first-quarter GDP report pointing to the economy contracting 0.3% and a revision of -0.7% being significantly unlikely, I like buying the “Yes” answers to contracts asking if GDP will exceed -1% and -1.5% for the final June 26 print. They are priced at $0.66 and $0.89 resulting in a total outlay of $1.55 and would pay out $2.00 to an adjusted figure no lower than -0.9%. Furthermore, because the contracts settle in almost two months, the investor will gain interest-like incentive coupons that are paid in proportion to shifting market values at an annualized rate of 3.83%.
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Note: Prices are highest bids as of the morning of April 30, 2025.
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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.
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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.
Disclosure: CFTC Regulation 1.71
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