![Check Your Calendar [Spread]](https://www.interactivebrokers.com/campus/wp-content/uploads/sites/2/2025/05/pod20250506mtkcham_coverimage-700x394.jpg "Check Your Calendar [Spread]")
The recently introduced international forecast contracts offer opportunities to investors who can use the products to correct mispricings that tend to surface in the early days of new markets. For example, a compelling slam dunk trade, in my opinion, is available for Singapore’s GDP release.
The country’s preliminary first-quarter GDP report on Monday, April 14, depicted year-over-year growth of 3.8%. The revised figure, which our ForecastTrader Contract is tied to, will be released on Monday, May 12. The “Yes” answer to the contract asking if GDP growth will exceed 3.5%, just a tad below the 3.8% estimate, costs only $0.22, which in my view offers a strong risk/reward profile for investors when considering that I think the price should be closer to $0.50. The closest threshold to a coin-flip contract pricing happens to be all the way down at 2.3%.
Finally, taking a look at the lower thresholds, a high-conviction directional combination trade is purchasing the “Yes” answers on the following six thresholds at 1%, 1.5%, 2%, 2.3%, 3% and 3.5% with a total cost of $3.26. If the final figure on May 12 is unchanged at 3.8% or lower at 3.7% or 3.6%, this directional combination trade would deliver $6.00 for the investor plus almost a month worth of interest-like incentive coupons with a current annualized rate of 3.83% that is applied to changing market values daily. Finally, for this trade to lose money, in consideration of a $3.26 cost, GDP would need to be 2.3% or lower, because even at 2.4%, the combo delivers $4.00 to the investor plus the interest-like incentive coupon. Folks, the path to 2.3% is incredibly narrow, in my opinion. I’d put the odds below 5%.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of April 17, 2025. Red circle around the thresholds was inserted by J. Torres to highlight his preferred, directional combination trades.
The 3.38% rate is a payment equivalent to interest in the form of an incentive coupon subject to variation with benchmark rates.
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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.
Disclosure: ForecastEx
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.
Disclosure: Forecast Contracts
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.
Disclosure: ForecastEx Market Sentiment
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
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.
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