The most popular prediction market contracts are currently those forecasting the weather – specifically temperature, according to Interactive Brokers (IBKR).
This was revealed by the company’s founder, Thomas Peterffy, in the US-based group’s quarterly earning’s call on Tuesday.
“Our most frequently traded contracts are temperature contracts,” Peterffy noted.
“We are currently working on tying up these temperature contracts with the electricity contracts and the natural gas contracts.”
His statement was in response to a question by Goldman Sachs Equity Research MD James Yaro on whether institutional demand was developing for prediction markets.
Peterffy noted the temperature contracts are being traded by utility companies, which have to judge the next day’s use of electricity.
“We are working on approaching those, and I think that sometime in the course of the year, you will see them onboarding,” he added.
Earlier in the call, Peterffy noted IBKR’s prediction markets platform, ForecastX, traded 286m pairs in the fourth quarter, a significant surge compared to 15m in the third quarter. The platform now lists more than 10,000 instruments.
Elsewhere, IBKR Chief Financial Officer Paul Brody noted that the group plans to expand the platform organically, as it does not wish to acquire rival prediction markets which offer sports betting, which most of them do.
The group added 1m new accounts last year, setting a new annual record, as client equity rose above $750bn at the year-end, marking another first. Net revenue surpassed $6bn, also for the first time in company history.
