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Event Contracts

Definition

Event contracts are financial instruments whose value depends on the outcome of a specific future occurrence. These derivatives allow participants to speculate on or hedge against the realization of a defined event, such as an election result, a sports outcome, or a specific market movement. Unlike traditional futures, their payoff structure is typically binary, settling at a fixed value if the event occurs and another if it does not. They offer a unique way to trade on verifiable, real-world happenings.