Interactive Brokers to Launch Prediction Market, Allowing Users to Bet On Environmental and Economic Events
Soon, doubling your money — or losing it all — could be as simple as answering a “yes or no” question. Interactive Brokers is set to launch ForecastEx, a predictions market on its platform, where investors can speculate on economic and environmental events. The market’s approval will help expand a fast-growing industry that has risen in popularity (and controversy) during the pandemic.
- ForecastEx will allow economic and environmental hawks to wager on various economic and climate indicators.
- IBKR says initial markets will include predictions on the Fed’s target interest rate, US consumer sentiment, and atmospheric carbon dioxide levels.
How does it work? For instance, in the target interest rate market, users could bet on specific ranges like 4.5%-4.75% or 5.25%-5.5%. If you thought one outcome was likely, you could bet “yes” if you expect that outcome to occur and “no” if you think it won’t. However, the cost of each bet will depend on how likely other users think it will happen. Correct predictions could double your money, but incorrect bets could result in a total loss of capital — making this an “all or nothing” market.
