Anyone trade Event Contracts with IB?

Other brokers offer these too and the ones I have looked at have spreads (or fees) that are too high compared to more traditional ways of trading movements in the same underlying assets. If you want to make money you make a market in these. If you want to gamble and don't mind that the odds are never in your favor then you would be on the retail side of these.
 
FreeGoldRush said:
Other brokers offer these too and the ones I have looked at have spreads (or fees) that are too high compared to more traditional ways of trading movements in the same underlying assets. If you want to make money you make a market in these. If you want to gamble and don't mind that the odds are never in your favor then you would be on the retail side of these.
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That's kind of the way I figured. It's heavily against the small trader, who doesn't have the ability to calculate legit odds on the fly, not to mention 'time decay', with the event expiring at the end of the day. Just sounds like a bad idea for individual traders to speculate in imho.
 
Aisone said:
That's kind of the way I figured. It's heavily against the small trader, who doesn't have the ability to calculate legit odds on the fly, not to mention 'time decay', with the event expiring at the end of the day. Just sounds like a bad idea for individual traders to speculate in imho.
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Anyone can calculate the correct value of these contracts in real-time from home. The data required is relatively inexpensive. But then how do you trade them? When looking at spreads and fees you discover that you don't (or should not).
 
I had never heard of these things, although I am familiar with the concept...

I don't have an account at IB. Are these products even available in the USA?

They sound an awful lot like binary options LOL
 
BMK said:
I had never heard of these things, although I am familiar with the concept...

I don't have an account at IB. Are these products even available in the USA?

They sound an awful lot like binary options LOL
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Based on this definition of a binary option, that's exactly what it sounds like it is. For example, you bet that the nasdaq is going to finish above 11,000 by the end of the day (or some predefined period.) I'm assuming they are available in the US or I wouldn't have gotten a marketing email.

A binary option is a type of option with a fixed payout in which you predict the outcome from two possible results. If your prediction is correct, you receive the agreed payout. If not, you lose your initial stake, and nothing more.
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Here's an alert the SEC issued almost ten years ago about binary options.

The biggest red flag is when they are off-market, i.e., many binary option platforms are operating illegally because they are not on a regulated exchange. But the contracts offered by IB are legit CME products.
 

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