What is an event contract?
An event contract is a standardized, exchange-listed contract that lets you take a Yes/No position on the outcome of a specific, measurable event. For example, you can trade on whether a particular asset's price will be above a certain level at a set time. Each contract settles at a fixed value if the event happens ("Yes") and at zero if it does not ("No"). You can trade event contracts on Interactive Brokers through the Prediction Markets platform.
What are "Short-Term or Volatile" Event Contracts?
Interactive Brokers separates event contracts into two categories that have different eligibility requirements:
- Short-Term or Volatile Event Contracts: the subject of this FAQ.
- All Other Event Contracts: longer-dated contracts on non-crypto (price or trade volume) underlyings.
A contract falls into the Short-Term or Volatile category if either of the following is true:
- The contract is part of a series in which a new contract is listed and expires more than once in a single day (for example, hourly or 15-minute contracts); OR
- The underlying asset is crypto, that is, the contract is tied to the price or trade volume of a cryptocurrency (for example, Bitcoin or Ether), regardless of the contract's duration.
Because these contracts are either very short-dated or tied to volatile underlyings (or both), their prices can move sharply in a very short time.
Both parts of the definition are explained in more detail in the two questions below.
What counts as "short-duration"?
The duration test looks at how long a single contract lasts, from listing to expiration. A contract is short-duration if a new version of the same contract is listed and expires more than once in a single day.
- Included: hourly contracts and 15-minute contracts. For example, markets that open and settle every hour or every quarter hour throughout the day.
- Not included: daily contracts. A daily contract is listed and expires only once per day, so it does not meet the test, even if it trades for less than 24 hours . For example, daily temperature contracts do not qualify as short-term.
What does "the underlying asset is crypto" mean?
It means the contract is tied to the price or trade volume of a cryptocurrency. For example, "will Bitcoin be above $X at time Y." These qualify as Volatile Event Contracts regardless of how long the particular contract is open for trading.
It does not mean any contract that merely references crypto or a crypto-related event. A contract about a crypto company's announcement, a regulatory decision, or another crypto-related news event is not automatically in this category. The test is whether the contract settles on the price or trade volume of a crypto asset.
Which exchanges and products does this cover?
This category covers all event contracts that meet the criteria above, regardless of which exchange lists them. That includes contracts listed on CME, Kalshi, and ForecastEx. If a contract meets the short-duration or crypto-underlying test, it is treated as a Short-Term or Volatile Event Contract no matter where it trades.
How is this different from other event contracts?
The mechanics of trading are the same, but Short-Term or Volatile Event Contracts have:
- Heightened eligibility (appropriateness) requirements, similar to those for Complex or Leveraged Products.
- A separate risk disclosure that you must accept before trading.
- A restriction on intermediaries trading for clients: financial advisors and introducing brokers cannot place these trades on behalf of their clients.
Additional Information