Event contract
An event contract is a derivative whose payout depends on whether a specified event occurs, such as an election result, an economic data release or the outcome of a game. Most pay a fixed $1 if the event happens and nothing if it does not, which is why the price reads as a probability. It is the legal term regulators and exchanges use for what are commonly called prediction-market contracts. The Commodity Exchange Act lets the CFTC bar event contracts involving unlawful activity, terrorism, assassination, war, gaming or similar activity if it finds them contrary to the public interest.
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