How Forecast Contracts Work

Binary contracts: they settle at $1 if the event occurs (“Yes”) or $0 if not (“No”).

Each contract has a question (e.g. “Will the Fed Funds rate be above 3.375% on date X?”). You buy “Yes” or “No” at a price between $0.02 and $0.99. The price reflects the market’s implied probability. At settlement, one side pays out; the other expires worthless. All contracts are fully collateralized and CFTC-regulated.

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Yes / No

Buy “Yes” if you expect the event; “No” if you don’t. Price = implied probability.

Settlement

$1 if correct; $0 if not. Fully collateralized.