Welcome to our guide to understanding the relationship between the Commodity Futures Trading Commission (CFTC) and prediction markets. Essentially for seeing how these trading sites work and you can safely use them.
We’ll give you a quick introduction to prediction markets and see how the CFTC regulates them to ensure that you get a safe way to make your trades. You’ll also get to see how the prediction markets phenomenon has evolved over the past couple of decades as the CFTC gives it a regulatory structure to operate within.
The CFTC has the exclusive jurisdiction over commodity derivatives markets in the US. These include all of those prediction markets sites that have become hugely popular over the past decade.
Once a prediction markets site gets regulatory approval by the CFTC, it will have to give customers a safe and fair way to trade by having the following features:
The prediction markets site must comply with CFTC-issued rules to ensure that customers are protected against price manipulation and insider trading. The CFTC will carry out regular market surveillance to ensure that no trading rules are breached.
The CFTC will ensure that its regulated sites have event contract pricing that is transparently aggregated based on the trading behavior of its customers with real-time displays of the relevant buying and selling prices. Similarly, you should be given clear indications as to what kinds of maker and taker fees you may be up against.
Each regulated prediction markets site must ensure that it doesn’t take sides on any of its featured event markets, but instead offers clear access for customers to make their trades with no influence from the site itself.
The fact that prediction markets are federally regulated means that customers should get the same experience in all 50 states and that no special bans can be issued.
Customers at prediction markets sites should be free to buy and sell their event contracts as and when they choose, rather than being locked in a particular position until settlement.
It’s been interesting to see how the CFTC and prediction markets have evolved together over the past few decades. Here’s a quick snapshot of how things have progressed:
No brand will be making it onto our shortlist of the best prediction markets sites without having CFTC regulation. After all, lacking such regulation would mean that the prediction markets site would be acting illegally by accepting customers in the US.
Thankfully, the CFTC has been hard at work in regulating several trustworthy brands over the past few years to give you plenty of choice in terms of where you make your trades. As such, there is a competitive landscape of trusted prediction markets sites that all have something unique to offer in terms of their event contracts.
This means that you’ll be left with the decision of deciding which of these sites to sign up to. The good news is that we’ve been busy ranking and rating these prediction markets brands and you’ll see the best of them displayed in the banners of this page. As such, you can simply click on any of the sites listed here, sign up and know that you’ll get a safe and fair way to make your trades.
It’s important to remember that the CFTC operates on a federal level and this means that individual states don’t have the power to regulate prediction markets sites. This is despite several states ranging from New York to Nevada that have all attempted to block various prediction markets brands from operating within their borders.
The CFTC has managed to successfully fend off these incursions, and it basically means that you should be able to sign up to any of the CFTC-approved sites listed in the banners of this page from all 50 states. Just be sure to check back to this regularly-updated guide to get the latest news as to this rapidly-changing situation.
It’s one thing to find a CFTC-regulated prediction markets site, and something else to know how to actually use it. Each of these sites will typically let you make your trades on contracts for anything from sports and culture to economics and cryptocurrencies.
But for the purpose of this example, we’re going to have a look at how you might be able to make some politics predictions and execute your trades around the question of who will be the Republican Presidential Nominee for 2028. For this, you would see a list of candidates along with their chances of winning such as the following:
The percentages would correlate with the price of each relevant contract. So to buy an event contract for JD Vance winning, it would cost you $0.39, whereas a contract for a Marco Rubio win would cost $0.21. If your predicted contract won, then it would be worth $1 and you would make a profit, whereas your contract would be worth nothing if your prediction was wrong.
So now you know what the CFTC and prediction markets sites are all about, it’s time to give them a try. In which case, just take the following steps to sign up and make your first trades:
Click on any of the CFTC-approved prediction markets brands in the banners of this page to load up their site from your web browser
Register your account by submitting personal information such as your name, date of birth, email address, mobile number and home address
Submit your account application and then verify your identity by submitting the required documents
Log into your trading account and make an opening deposit via one of the accepted payment methods
Browse the available prediction markets and click on the event contract you wish to purchase
Select how many of that event contracts you want to buy and execute the trade
Once you have done this you can simply monitor the price movements of the contact that you’ve purchased and decide when to try and sell it. Note that because it’s a CFTC-regulated site, the prices should all be transparently formulated and the prediction markets brand shouldn’t influence your trading behavior.
By now you will understand that the CFTC plays a pivotal role in ensuring that you get a safe and fair way to trade event contracts at prediction markets sites. The organization will constantly be monitoring its regulated sites to ensure that they behave correctly and that you are safeguarded against risks such as insider trading, price manipulation and fraud.
Plus it’s important to note that only CFTC-regulated sites will be featured in the banners of this page to ensure that you get a secure and trustworthy way to make your trades. So be sure to hit on any of the prediction markets sites listed here, register your account and start trading.
This is the Commodity Futures Trading Commission which is a government agency tasked to regulate various derivatives markets. Such regulation requires the CFTC to ensure market integrity and protect traders from fraud.
This is a weekly report issued by the CFTC that lists the holdings of traders for various futures markets in the US. The report is released every Friday at 330pm ET.
You will usually have to be at least 18 years old and this is something that you will need to verify upon signing up. Check out our guide that asks, ‘Are prediction markets legal?’ for more about this issue.
Right here in this guide, as we’ll keep you updated as to all of the latest developments regarding the CFTC and prediction markets. Essential reading for getting a safe and trusted way to make your trades.
The Securities and Exchange Commission (SEC) regulates securities whereas the CFTC regulates commodities. While there is a fair amount of overlap, it’s an important distinction to make.
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