Interactive Brokers Cites 'Administrative Challenges' to Delay Prediction Exchange Launch

Wednesday, 10/07/2024 | 08:43 GMT by Tareq Sikder
  • ForecastEx will allow clients to trade on US economic and global climate events.
  • Interactive Brokers is the first Futures Commission Merchant to join ForecastEx.
Interactive Brokers
Interactive Brokers

The launch of ForecastEx, a prediction exchange specializing in economic and climate events, has been postponed until later in the summer due to administrative issues, according to Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers.

ForecastEx Market Designations Approved

ForecastEx, a wholly-owned subsidiary of Interactive Brokers Group, has received the required designations from the Commodity Futures Trading Commission (CFTC) to operate as a contract market and derivative clearing organization. The exchange was originally planned to begin operations on Monday, July 8, 2024.

Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers
Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers, Source: LinkedIn

Steve Sanders informed Traders Magazine that ForecastEx will allow Interactive Brokers' clients in eligible countries to trade forecast contracts on the probabilities of future US economic and global climate events.

He explained that US economic events encompass Unemployment Claims, the Consumer Price Index, Retail Sales, Fed Funds, Housing Starts, and others, while global climate events include temperatures and atmospheric CO2 levels.

“To trade, clients simply choose YES or NO on a forecast contract,” Sanders said. “We have been interested in this topic for a very long time, and it is a good way to understand the consensus view on controversial issues,” he added.

ForecastEx Targets FCM Engagement

Thomas Peterffy, Founder and Chairman of Interactive Brokers, has been working on and experimenting with ForecastEx for nearly ten years. Sanders noted, “But we’ve had other priorities.” “We started earnestly working on it in November 2021,” Sanders stated.

Interactive Brokers is the first Futures Commission Merchant (FCM) to join ForecastEx as an exchange member. Sanders mentioned, “Reinvigorating the FCM community is a big part of ForecastEx’s model and ForecastEx is actively reaching out to other FCMs to join in the effort.”

Eligible individual and institutional investor clients of Interactive Brokers LLC, Interactive Brokers Hong Kong Limited, and Interactive Brokers Singapore Pte. Ltd. will be able to trade forecast contracts on IBKR ForecastTrader, a speciality trading platform .

Sanders believes that retail investors are sophisticated enough to invest in these types of instruments. “Contracts listed on ForecastEx are simple and intuitive, and individual investors with knowledge of the economy could be interested in these contracts,” he said.

The launch of ForecastEx, a prediction exchange specializing in economic and climate events, has been postponed until later in the summer due to administrative issues, according to Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers.

ForecastEx Market Designations Approved

ForecastEx, a wholly-owned subsidiary of Interactive Brokers Group, has received the required designations from the Commodity Futures Trading Commission (CFTC) to operate as a contract market and derivative clearing organization. The exchange was originally planned to begin operations on Monday, July 8, 2024.

Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers
Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers, Source: LinkedIn

Steve Sanders informed Traders Magazine that ForecastEx will allow Interactive Brokers' clients in eligible countries to trade forecast contracts on the probabilities of future US economic and global climate events.

He explained that US economic events encompass Unemployment Claims, the Consumer Price Index, Retail Sales, Fed Funds, Housing Starts, and others, while global climate events include temperatures and atmospheric CO2 levels.

“To trade, clients simply choose YES or NO on a forecast contract,” Sanders said. “We have been interested in this topic for a very long time, and it is a good way to understand the consensus view on controversial issues,” he added.

ForecastEx Targets FCM Engagement

Thomas Peterffy, Founder and Chairman of Interactive Brokers, has been working on and experimenting with ForecastEx for nearly ten years. Sanders noted, “But we’ve had other priorities.” “We started earnestly working on it in November 2021,” Sanders stated.

Interactive Brokers is the first Futures Commission Merchant (FCM) to join ForecastEx as an exchange member. Sanders mentioned, “Reinvigorating the FCM community is a big part of ForecastEx’s model and ForecastEx is actively reaching out to other FCMs to join in the effort.”

Eligible individual and institutional investor clients of Interactive Brokers LLC, Interactive Brokers Hong Kong Limited, and Interactive Brokers Singapore Pte. Ltd. will be able to trade forecast contracts on IBKR ForecastTrader, a speciality trading platform .

Sanders believes that retail investors are sophisticated enough to invest in these types of instruments. “Contracts listed on ForecastEx are simple and intuitive, and individual investors with knowledge of the economy could be interested in these contracts,” he said.

About the Author: Tareq Sikder
Tareq Sikder
  • 818 Articles
  • 4 Followers
About the Author: Tareq Sikder
A Forex technical analyst and writer who has been engaged in financial writing for 12 years.
  • 818 Articles
  • 4 Followers

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