What ForecastEx is, and how its forecast contracts work
ForecastEx is a CFTC designated contract market and clearing house for yes or no forecast contracts, affiliated with Interactive Brokers. Each contract costs between 1 and 99 cents and pays $1.00 if your answer is right and nothing if it is not.
What it is
ForecastEx is a CFTC designated contract market and clearing house for yes or no forecast contracts, affiliated with Interactive Brokers.
ForecastEx is the CFTC registered Designated Contract Market (DCM) and Derivative Clearing Organization (DCO) for Forecast Contracts.
Organization: ForecastEx LLC Status: Designated Date: 2024-06-24 00:00:00
IBLLC is an Affiliate of ForecastEx LLC because IBLLC and ForecastEx LLC share the same parent company, IBG LLC.
How a contract works
Each contract costs between 1 and 99 cents and pays $1.00 if your answer is right and nothing if it is not.
There are no counterparties: There are no sellers, only buyers. The yes and no are two separate contracts: They do not share the same price, and the investors will never trade the same contract.
There is no selling of Forecast Contracts, instead, to close a forecast position the investor will buy the opposite contract in the Forecast Market (i.e. a Yes Contract must be purchased to close a No Contract and vice versa).
Topics: economics, elections, government and climate, with weekly, monthly, quarterly and yearly expiring contracts.
What it costs, and the coupon
The exchange fee is $0.01 per contract on each side, and Interactive Brokers charges no commission on ForecastEx contracts.
The fee rate is $0.01 per contract, charged per side
ForecastEx pays an Incentive Coupon on the value of your contract, funded by interest on the cash collateral; Interactive Brokers quoted 3.38% APY when we checked.
ForecastEx invests that cash and passes 100% the earnings back to the Members each month.
That is before an administration fee, which its own rules set out:
ForecastEx withholds 50 basis points of the interest earned by the Clearinghouse on the cash collateral balances in Customer and Non-customer Collateral Accounts.
Incentive coupons are currently paid at a rate of 3.38% APY. Rates are subject to change.
How to get access
Through a futures commission merchant that is a ForecastEx member, such as Interactive Brokers; ForecastEx takes no retail accounts directly.
You can buy a contract by opening an account with a qualified Futures Commission Merchant (FCM) who is a Member at ForecastEx.
Brokers listed: Interactive Brokers, Robinhood, Advantage Futures.
Interactive Brokers' Prediction Markets platform provides unified access to three leading U.S. prediction market exchanges: Kalshi, CME Group, and ForecastEx.
Event Contracts are only available to eligible clients, 21 years and older, of Interactive Brokers LLC, Interactive Brokers Canada Inc., Interactive Brokers Hong Kong Limited, Interactive Brokers Ireland Limited and Interactive Brokers Singapore Pte. Ltd.
One thing to know
An Interactive Brokers affiliate quotes both sides of many markets, and its bids fill last:
In its capacity as an Affiliated Customer, Global Investments will operate as a liquidity provider, providing liquidity to the exchange by maintaining Bids on both the “Yes” and the “No” of various Event Markets.
Global Investments Bids are always filled last by the Exchange at every price level.
