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Let's gamble, says IBKR

rforno
edited June 26 in Other Investing
Gotta keep customers 'engaged' on their platform, right? What's next? In-meeting parlays on FOMC days? Do prospective customers get a promo code and covered up to their first $1000 of bets if they sign up during Jerome's press conference? The possibilities are endless!

(nb: these are not to be confused with binary equity options that are traded at NADEX, mind you...)


Per WSJ: https://www.wsj.com/finance/want-to-bet-on-the-cpi-or-jobs-report-a-prediction-market-is-coming-to-this-brokerage-8a174b52?mod=hp_lead_pos6

The trading platform Interactive Brokers Group is launching contracts that allow customers to wager on future events related to the economy and climate.

The contracts let users take yes-or-no positions on questions such as whether the consumer-price index will rise above a certain number or if the global temperature will reach a specific level.

Interactive Brokers’ prediction market, ForecastEx, is set to begin operating July 8, the company said. ForecastEx recently received the necessary approvals from the Commodity Futures Trading Commission to operate. The contracts are a new type of derivative and aren’t securities.

The contracts that will be available at launch include economic and climate indicators such as the Federal Reserve’s target interest rate, U.S. consumer sentiment, national debt, retail sales and atmospheric carbon dioxide. Interactive Brokers plans to expand to indicators around the world and other topics in the future.

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Customers will be able to buy “yes” contracts or “no” contracts based on a stated outcome for an indicator. Contract prices range from 2 cents to 99 cents and fluctuate depending on what users are willing to pay for that outcome.

When the event concludes—for example, the moment the CPI report is released—the correct contract is worth $1 and the incorrect contract is worth nothing.

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Comments

  • hank
    edited June 26
    ”Customers will be able to buy “yes” contracts or “no” contracts based on a stated outcome for an indicator.”

    Yes, this sounds a lot like DraftKings. Could cut into their business.
  • Derf
    $5 -$10 player at crap table. Think I'll stay away.
  • hank
    edited June 27
    hank said:

    ”Customers will be able to buy “yes” contracts or “no” contracts based on a stated outcome for an indicator.”

    Yes, this sounds a lot like DraftKings. Could cut into their business.

    Well, there is a difference. On DraftKings you click whether a team will Win or Lose.

    Sounds like at IBKR you have to click: Up or Down. I think I’d be able to make the adjustment however.
    :)

  • Derf
    @hank Try picking your team & then flip it before betting . Play it on paper.
    Good luck hank,Derf
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