On Thursday, Interactive Brokers (Nasdaq: IBKR) announced the launch of Forecast Contracts, offering US investors the opportunity to trade on upcoming election outcomes.
Interactive Brokers to Introduce Forecast Contracts on Election Outcomes
The contracts debuted on Thursday evening through the ForecastEx exchange, allowing investors to hedge against political volatility or capitalise on their political insights.
Forecast Contracts enable investors to take positions on major U.S. political events, such as the 2024 Presidential Election and key Senate races.
Examples include contracts on whether Kamala Harris or Donald Trump will win the US presidency or whether the Democratic Party will secure control of the Senate or House of Representatives.
Contract prices, ranging from $0.02 to $0.99, reflect market sentiment on each event’s likelihood.
Thomas Peterffy, Founder and Chairman of Interactive Brokers, highlighted the benefits of this new product: “Forecast Contracts allow investors to act on the most crucial issues shaping our future. These contracts give traders a direct line to market sentiment on elections, helping them manage risk or express views on political events.”
With the contracts, investors can hedge against election-driven market swings or potentially profit from their political predictions.
Contracts settle at $1 for correct outcomes and $0 for incorrect ones. Investors can access these contracts through IBKR ForecastTrader.
Interactive Brokers said it plans to expand Forecast Contracts globally, strengthening its position in innovative financial products and providing investors with tools to navigate politically uncertain markets.
