Interactive Brokers Launches ForecastEx Prediction Exchange

Interactive Brokers is gearing up to launch ForecastEx, a groundbreaking prediction exchange focusing on US economic and global climate events. The launch, initially scheduled for July 8, 2024, has been postponed to later in the summer due to administrative reasons, as confirmed by Steve Sanders, Executive Vice President of Marketing and Product Development at Interactive Brokers.

ForecastEx, a subsidiary fully owned by Interactive Brokers Group, has secured essential designations from the Commodity Futures Trading Commission (CFTC) to function as a contract market and derivative clearing organization. This pivotal development positions ForecastEx uniquely within the financial landscape, allowing it to offer forecast contracts on future probabilities of events like US economic indicators, Unemployment Claims, Consumer Price Index, Retail Sales, Fed Funds, and Housing Starts, as well as global climate metrics such as temperatures and atmospheric CO2 levels.

Sanders articulated that clients of Interactive Brokers across eligible jurisdictions will trade these forecast contracts by selecting either “YES” or “NO” based on their predictions. He emphasized the platform’s role in aggregating consensus views on contentious issues, providing valuable insights to investors.

Interactive Brokers Launches ForecastEx Prediction Exchange

The brainchild of Thomas Peterffy, Interactive Brokers‘ Founder and Chairman, ForecastEx has been developing for nearly a decade, with intensified efforts since November 2021. Sanders underscored their commitment to involving the Futures Commission Merchant (FCM) community, with Interactive Brokers being the first FCM to join ForecastEx as an exchange member. Sanders expressed optimism in revitalizing the FCM sector through ForecastEx and indicated ongoing efforts to engage other FCMs.

Forecast contract trading will be facilitated through IBKR ForecastTrader, a specialized platform accessible to eligible individual and institutional clients of Interactive Brokers subsidiaries globally, including Interactive Brokers LLC, Interactive Brokers Hong Kong Limited, and Interactive Brokers Singapore Pte. Ltd.

Sanders acknowledged the sophistication of retail investors in comprehending and investing in such instruments, believing that ForecastEx’s straightforward contract structures will appeal to those with a solid understanding of economic dynamics. Lastly, as anticipation builds for its imminent launch, ForecastEx stands poised to transform how investors gauge and navigate economic and climate uncertainties, leveraging Interactive Brokers’ robust infrastructure and strategic foresight in financial markets.

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