Interactive Brokers Launches Forecast Contracts on Economic and Climate Events

Interactive Brokers Group (Nasdaq: IBKR), an automated global electronic broker, is pleased to announce that its wholly-owned subsidiary, ForecastEx LLC, has received the necessary designations from the Commodity Futures Trading Commission (CFTC) to operate a contract market and derivative clearing organization. ForecastEx starts operations on Monday, July 8, 2024, and Interactive Brokers clients from eligible countries will have immediate access. Interactive Brokers is the first Futures Commission Merchant to join as an exchange member.

"ForecastEx is a prediction market that we have been working on and experimenting with for nearly 10 years,” said Thomas Peterffy, Chairman and Founder of Interactive Brokers Group. "Planning for the future is the ultimate task for any business leader, government official or individual. For those plans to work according to expectations, they must fit into unfolding conditions resulting from all our actions. The more perfect information we have about the state of the world, the more perfectly we can plan and coordinate our actions. Markets are the most direct ways of expressing our unbiased expectations, and market prices tell us the prevailing consensus. We may adjust our plans based on consensus forecasts or express our disagreement to earn a profit or hedge our exposures.”

Contracts listed on ForecastEx are simple and intuitive. For example, suppose an investor believes an event will occur, such as an increase in the US Consumer Price Index above a specific value. In that case, they can buy a "yes" contract. Conversely, if they think the event will not happen, they can purchase a "no" contract. Contract purchase prices range from $0.02 and $0.99. The value of these contracts will continue to fluctuate based on market participants’ evolving judgment of probabilities, directly reflecting the collective market view of the likelihood of the event. Upon the event's resolution (e.g., the moment the US Bureau of Labor Statistics announces the CPI), the contract settles at a predefined value — $1 for a correct contract and $0 for the incorrect one.

ForecastEx contracts are ideal for establishing the consensus view on controversial issues and hedging economic exposure.

ForecastEx contracts for the following indicators will be immediately available:

Economic

• US Fed Funds Target Rate
• US Consumer Sentiment
• US Housing Starts
• US Retail Sales
• US Building Permits
• US Consumer Price Index
• US Payroll Employment
• US Unemployment Rate
• US Corporate Profits
• US Initial Jobless Claims
• US National Debt
• US Real GDP

Climate

• Global Temperature
• US Temperature
• Atmospheric Carbon Dioxide

ForecastEx contracts have weekly, monthly, quarterly and annual durations. Interactive Brokers will pay interest at 0.5% under the prevailing Fed Funds rate on the closing market value of positions. Income interest accrues daily and is paid monthly, currently at a rate of 4.83% APR.

Eligible clients of Interactive Brokers LLC, Interactive Brokers Hong Kong Limited, and Interactive Brokers Singapore Pte. Ltd. can trade ForecastEx contracts on IBKR ForecastTrader. After its initial launch, ForecastEx will expand internationally and cover additional local and controversial global issues. Contracts will be limited only by the availability of credible, impartial arbiters of event resolutions.

For additional information, please visit:

US - IBKR ForecastTrader (US and countries served by IB LLC)
Hong Kong - IBKR ForecastTrader
Singapore - IBKR ForecastTrader

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About Interactive Brokers Group, Inc.:

Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, and foreign exchange around the clock on over 150 markets in numerous countries and currencies from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation have enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron’s, Investopedia, Stockbrokers.com, and many others.

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