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Posted January 28, 2026 at 12:46 pm
Arbitrage opportunities can present themselves when different markets offer divergent prices for potential outcomes of certain events. In the case of BlackRock executive Rick Rieder being nominated as Fed Chair, distinct venues offer variable probabilities as to his chances of President Trump choosing him for the position. Against this backdrop, the ForecastTrader platform has former central bank Governor Kevin Warsh in the lead at 30% while Rieder is at an undervalued 20%, in my opinion. The only other candidate with a double-digit possibility is current Governor Christopher Waller who is at 10%.
The last four weeks of initial unemployment claims have featured figures of 200k, 207k, 199k and 200k, substantially beneath the 52-week average of 225k. Filings are likely to drift north toward the annual mean once the December and January holiday effects are behind us as is typical in the post-pandemic era, however, participants price a figure below 210k in tomorrow’s print with a 59% degree of certainty. Meanwhile, we’ve only failed to exceed 190k one time in the past six years and in just 33 occurrences in the 3,081 observations going all the way back to 1967. Indeed, the 98.93% historical probability of getting a number above 190k make the “Yeses” at 180k and 190k especially compelling. Those are undervalued in my opinion and are going for $0.94 and $0.84.
The Dallas Fed’s Weekly Economic Index (WEI) has failed to come in north of 2.4% in 12 of the past 14 weeks, which features an average reading of 2.23%. Against that backdrop, the “No” at 2.4% appears to have an attractive risk-reward dynamic in my view since its going for $0.57 and should be priced closer to $0.78.
Source for images: ForecastEx
Note: Prices are highest bids as of the morning of Jan. 28, 2026. Red circle around the thresholds was inserted by J. Torres to highlight “Yes” answers throughout different levels.
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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.
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.
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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.
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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