Kamala Harris Surges on
IBKR ForecastTrader

Last night, Kamala Harris engineered a surprisingly ferocious comeback on IBKR's ForecastTrader platform. Her probability of winning the election rose from 38% the night before to 44% at 8 pm last night, and this was done on a trading volume of about $40 million.

If it is some Democrat billionaire trying to tilt the market in Harris' favor, he is putting a lot of money at stake against a sea of traders on the platform, who for over a week have been at a consensus of 62%, +/-2% for Trump and 38%, +/-2% for Harris. 6% is a huge change in probabilities in just 24 hours in such a closely watched race.

Indeed, many observers worry that prediction markets could distort election outcomes, but that is unlikely. On CFTC-authorized, regulated prediction markets, the Exchange has an identifying tag representing both sides of each trade.

Market manipulation is a criminal offense punishable by fines and jail, and regulated exchanges are required to investigate and report suspicious activities. Therefore, manipulation is unlikely to have been the cause.

If it is not manipulation, then what is it? It must be that today's reporting of news events has changed the probabilities in the minds of the currently over 100,000 participants on this platform.

This must be useful feedback to the campaigns to have a numerical indicator to help them modify their messages accordingly.

Prediction markets will become incredibly useful in the years to come because they can provide real-time feedback to organizations that will shape our futures.

To trade or view the live presidential election probabilities, go to IBKR ForecastTrader

Thomas Peterffy
Founder and Chairman
Interactive Brokers