As we’ve been building out our offerings within our IBKR ForecastTrader prediction market, certain mispricings have arisen in our newer, international contracts. Indeed, these developments may incentivize customers to participate in the initiative, which can be used to speculate, hedge, inform and more. One opportunity that I like for tomorrow is the Canada Consumer Price Index. February’s result came in at 2.6% year over year and the median estimate calls for an unchanged reading of 2.6% for March. But IBKR Forecast Contract thresholds at 2.1% and 2.3% are priced at just $0.58 and $0.29 for the “Yes” answers, effectively paying out a dollar on each if the result exceeds 2.1% for the former contract, and 2.3% for the latter one. But since the consensus estimate is at 2.6%, there’s some wiggle room for a downside surprise. Depending on your risk tolerance, you may want to purchase one of the two “Yes” contracts. But if you’re especially confident that tomorrow’s Canada CPI will come in at 2.4% or above like I am, then a directional combination trade may work for you. Buying the “Yes” answer on both would cost just $0.87 and deliver $2.00 back on any number that is 2.4% or higher. Meanwhile, a number that is 2.2% or 2.3% will still deliver a profit on this combination trade, since the 2.1% threshold would pay out $1.00, considering that the total cost of the combination is $0.87.
Source: ForecastEx
Note: Prices are highest bids as of the morning of April 14, 2025.
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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 Hong Kong 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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