Interactive Brokers Expands Forecast Contracts to European Market with New Trading Options.

Interactive Brokers is expanding Forecast Contracts to the European market, allowing investors to take positions on specific events. These event-based contracts are available 24/7 and offer a straightforward way to express a view or manage risk tied to a particular outcome. Investors can trade through IBKR ForecastTrader or other platforms and earn an interest-like incentive coupon based on the market value of open positions. The annualized rate is currently 3.83% APY.

Interactive Brokers (IBKR) has announced the expansion of its Forecast Contracts into the European market, offering investors a new tool to manage event-driven risks with precision and simplicity. These event-based contracts, available nearly 24 hours a day, 6 days a week, allow investors to take positions on clearly defined outcomes related to financial, economic, and climate indicators.

Forecast Contracts provide a straightforward way to express a view or manage risk tied to a specific event. Each contract is based on a simple yes-or-no question, such as whether the US Federal Reserve will raise the Fed Funds Target Rate above 3.875% at a specific meeting. If the investor's prediction is correct, the contract settles at USD 1.00; if incorrect, it settles at zero. Prices range from USD 0.02 to USD 0.99, reflecting the market’s perceived probability of the outcome.

“Investors worldwide are increasingly seeking tools that help them manage event-driven risks with precision and simplicity,” said Milan Galik, Chief Executive Officer at Interactive Brokers. “By extending access to Forecast Contracts in Europe, we’re giving investors more ways to act on their views and manage risk through our comprehensive, global platform” [1].

Investors can trade through IBKR ForecastTrader, a dedicated web-based interface, or other Interactive Brokers platforms. In addition to the potential payout from the contract settlement, investors can earn an interest-like incentive coupon based on the market value of open positions. The incentive accrues daily and is paid monthly, with the current annualized rate at 3.83 percent APY [1].

Forecast Contracts are available to eligible clients of Interactive Brokers LLC, Interactive Brokers Ireland Limited, Interactive Brokers Canada Inc., and Interactive Brokers Hong Kong Limited. The product is listed by ForecastEx LLC, a wholly owned subsidiary of Interactive Brokers and a CFTC-regulated Designated Contract Market. Availability may vary by jurisdiction and client eligibility [1].

This expansion follows growing investor demand for predictive risk management tools, driven by the increasing complexity of financial markets and the need for sophisticated risk management strategies [2]. The move by Interactive Brokers underscores its commitment to providing investors with advanced trading tools and platforms.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/IBKR/pressreleases/33734230/interactive-brokers-expands-forecast-contracts-to-european-market/
[2] https://www.stocktitan.net/news/IBKR/interactive-brokers-expands-forecast-contracts-to-european-rqch9ebtuakd.html