Election prediction markets work by letting you take a position on a specific yes-or-no election question (for example, who wins, which party controls a chamber, or whether a candidate wins a state — depending on listings). If the outcome resolves in your favor, the event contract settles at a fixed value (commonly $1) and otherwise settles at $0, subject to the contract's terms.
How do election prediction markets work?
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What are Prediction Markets?
IBKR Prediction Markets offers exchange-listed event contracts that allow you to trade on yes-or-no outcomes across categories such as politics (including eligible U.S. elections), economics, finance, and climate indicators. At expiration, these contracts either settle at $0 or $1, depending on the outcome…
What are CME Event Contracts?
CME Event contracts let investors trade on their knowledge or opinion about a specific question with a “yes or no” outcome.
They are daily expiring, cash settled, European style options on futures contracts, offering short-term trading opportunities for persons seeking to take a position on daily price moves on futures using smaller value contracts…
Short-Term and Volatile Event Contracts: The Basics
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…
Short-Term and Volatile Event Contracts: How They Work
How does an event contract pay out?
Each contract is binary. It settles at its full contract value if the event resolves "Yes" and at zero if it resolves "No." Prices trade between those two endpoints (commonly quoted from about $0.01 up to $0.99 per contract), so the price at any moment reflects the market's estimate of how likely the event is to occur. A contract trading at $0.60, for example, implies roughly a 60% market-implied probability of a "Yes" outcome…