Prediction Markets at Interactive Brokers

ForecastTrader by Interactive Brokers revolutionizes how investors capitalize on their insights into political, economic, financial, and climate developments through innovative Prediction Markets. Prediction markets allow investors to take binary yes-or-no positions on critical events, from major elections and economic data releases to Federal Reserve policy decisions and climate patterns, while limiting their risk. Each contract, priced between $0.02 and $0.99, caps potential losses at the initial investment amount. Winners receive a standard $1.00 payout per contract that expires in-the-money, and positions can be exited at any time by taking the opposing side. Trading is available around the clock, seven days a week. System may be unavailable each day due to maintenance. For more information, please view the system maintenance schedule. ForecastTrader includes a daily-accruing incentive coupon based on closing position values, paid out monthly. From the US Presidential Election to Real GDP releases and Fed Funds rate decisions, ForecastTrader converts market intelligence into executable trades featuring clear pricing, capped risk, and full integration across IBKR’s trading ecosystem.

On the IBKR Desktop the investor can access the Forecast Trader by clicking on the Sitemap icon to the left, then clicking on ForecastTrader in the Trade section.

Once the ForecastTrader screen appears, the investor will see Prediction Markets on Government, Economic Indicators, Elections, Technology, Financial Markets, Environmental, and CME Event Contracts.

Investors have the ability to browse contracts by choosing specific categories or selecting “Popular” to view a curated collection of trending contracts across all areas. When an investor clicks on a sector such as “Economic Indicators,” they’ll be presented with subcategories including Economic Activity, Education, Housing, Industry, Interest Rates and more. Additionally, investors can toggle between List and tile viewing formats for easier navigation as well as sort alphabetically and by open interest.

The investor clicks on the contract they are interested in, and the screen will update with information on that specific contract.  On the left side, the investor can view and click on all thresholds or outcome dates for each event. When an outcome is selected, the investor will see the price history of the outcome on a chart at the top of the screen. They can click on either “Yes” or “No” to view each side’s price history.

Directly below is an activity panel showing the investor’s positions, orders and trades and continue downward is an explanation about the event and a full list of Market Rules can be viewed by clicking the link to access a PDF of all rules surrounding the ForecastEx event contracts market. Knowing the rules for trading ForecastEx contracts is crucial in order to:

• Understand contract specifications: As stated earlier, ForecastEx contracts arebased on the probability of specific events occurring, such as economic indicators, political outcomes, or environmental results. Each contract has a specified payout structure, typically ranging from $0.02 to $0.99, with a potential settlement payment of $1.00 if the prediction is correct. Understanding these specifications helps traders make informed decisions about which contracts to buy.
• Regulatory Compliance: ForecastEx operates under the regulations of the Commodity Futures Trading Commission (CFTC). Understanding these regulations ensures that traders comply with legal requirements and protects them from fraudulent activities.

The timeline of the contract’s last time and date for trading, release of results, and the payout is listed clearly for the investor to view. The investor can see the trading schedule by clicking on “View Trading Schedule”.

Below “View Trading Schedule” are contract specifics like the market name, measured period, minimum tick, and more.

The Data & Resolution area will have a link to the source agency for the contract, click on it to access.

The investor can scroll back up to the chart to create an order. To place an order, in this case buying a Yes contract, the investor clicks the Green Yes button to create an order ticket.  The investor enters the maximum or limit price they wish to pay, and enters a number of contracts to buy. The trade value populates the Amount field as determined by the number of contracts and the limit price inputs. The investor may choose Day, Immediate or Cancel, or Good till Cancelled from the Time in Force dropdown box. At the foot of the order ticket, the investor’s Potential Profit and Maximum Loss are displayed along with the Estimated Total for the Order in the event that the order fills. The investor clicks the Preview button to see the account impact should the order fill. The investor submits the order for execution by clicking Transmit Buy Order. They then click Done

Prediction Market positions are opened by purchasing either a Yes or No contract. If the investor already owns a Yes contract and wants to exit prior to the prediction contract’s expiration, they can do so by buying the No contract for the same market, which offsets their original position” 

Remember that Prediction Markets may only be purchased. An investor can close an existing Yes contract by purchasing the opposing No contract.

The investor can view open positions by clicking the Portfolio button and reviewing the Positions tab. Investors can adjust or close open orders from the Orders tab. Completed trades are displayed on the Trades tab.

ForecastTrader by Interactive Brokers represents a transformative approach to event-based investing, offering traders a transparent, accessible way to capitalize on their insights into real-world developments across political, economic, financial, and environmental sectors. With its capped risk at the initial investment, and straightforward $1.00 payout for accurate predictions, the service democratizes sophisticated event trading for investors at all levels. By combining clear contract specifications, regulatory compliance through CFTC oversight, transparent market rules, and seamless integration with IBKR’s comprehensive trading ecosystem, ForecastTrader converts market intelligence into executable strategies with defined risk parameters, giving investors a powerful tool to transform their informed perspectives into potential profits with complete transparency and controlled exposure.