Event contract trading involves substantial risk of loss and is not appropriate for all investors. You may lose the entire amount you invest.

Paragon Global Markets, LLC, d/b/a Fanatics Markets IB, is registered with the Commodity Futures Trading Commission (“CFTC”) as an introducing broker and is a member of the National Futures Association (“NFA”). Fanatics Markets IB connects customers to markets and pricing offered by North American Derivatives Exchange, Inc. d/b/a Crypto.com | Derivatives North America (“CDNA”), a CFTC-regulated Designated Contract Market, for certain fully collateralized event contracts. These event contracts are a type of option that the CFTC classifies as cleared swaps. Clearing services are provided by CDNA in its capacity as a CFTC-registered Derivatives Clearing Organization (“DCO”). DCOs have rules that govern the use of cleared swaps customer collateral, and/or the transfer, neutralization of risks, and liquidation of cleared swaps in the event of a default relating to a cleared swap customer account. An affiliate of Fanatics Markets IB acts as a technology service provider to CDNA and Fanatics Markets IB supporting a user interface for your access to CDNA markets and pricing. As described in the customer agreement between you and Fanatics Markets IB, Fanatics Markets IB is not opening and carrying an account for you. There is currently no futures commission merchant carrying your account; rather, you are being introduced to CDNA for trading and clearing as a member of CDNA on a non-intermediated basis. An affiliate of Fanatics Markets IB, Morton St. Trading Investments, LLC, is seeking registration with the CFTC as a futures commission merchant and NFA membership; if such registration and membership are granted, this affiliate would carry your account. If this occurs, you will receive additional disclosures and be asked to enter into a customer agreement with, and fund an account with, the affiliate.

Your trading on CDNA and clearing services received from CDNA are governed by the and any member agreement, other terms of service, or other agreement entered into between you and CDNA or established by CDNA from time to time. The CDNA Rules address the use of collateral for your fully collateralized options. In the unlikely event of an insolvency of the CDNA DCO, any transfer or liquidation of your positions and other customer rights would be determined pursuant to the commodity broker liquidation provisions of the U.S. Bankruptcy Code and Part 190 of the CFTC’s regulations.

This statement does not describe all risks or other significant considerations associated with trading swaps, options, or fully collateralized event contracts. In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in these products is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances.

No event contract has been endorsed by any sports league or association (“Association”), any Association participant that is part of such Association, or any Individual in any Association. The use of the name of any Association, Association participant, or individual in any Association does not indicate any endorsement of an event contract. To the extent an event contract references an agency, data or pricing source, index, or other measure, such reference does not indicate an endorsement of this tradeable financial instrument.

Live data is for informational purposes only. It may be delayed or incorrect. Not available in all states. Must be 21+ US resident. 

Description of Event Contracts

Event contracts are a type of derivative that the CFTC classifies as “binary options” and “swaps,” and which are sometimes referred to as forecast or prediction contracts. An event contract is a contract whose value is based on whether a specific condition, occurrence or extent of an occurrence will occur or not occur at or before a specific time. Event contracts are a type of derivative, in that they derive their value from an underlying asset. However, event contracts have a number of differences from other derivative products. Unlike futures and options, event contracts are fully collateralized and cannot be purchased on margin. Additionally, event contracts are not marked-to-market. As a result, event contracts do not currently require the deposit of additional funds to maintain an existing position. Event contracts are further differentiated from some other derivatives in that they are not restricted to using a physical commodity or tradable financial instrument as their underlying asset and are always settled by cash settlement. The value of a futures or in-the-money options contract at expiration will vary depending on the price of the underlying asset, whereas event contracts will typically have a binary settlement value, for example, of either $1.00 or $0.

Risks of trading in event contracts

Event contract trading involves substantial risk of loss and is not appropriate for all investors. You may lose the entire amount you invest.

Market participants’ expectations regarding an event that is the subject of an event contract may not match the outcome, which can cause unexpected losses. Contract pricing may not always reflect the actual probability that an event occurs. Data published by a designated Source Agency (as defined in the CDNA Rules) is used to determine whether the event that is the subject of an event contract has occurred. Market participants may be exposed to risk of loss if a Source Agency experiences a security breach, reports inaccurate data, or does not report data at the expected date or time. Additionally, while CFTC rules require CDNA to list only contracts that are not readily susceptible to manipulation, and CDNA prohibits trading in event contracts by certain persons who may have “inside” knowledge of, or be able to influence, the relevant event, there can be no guarantee against manipulation of the contract notwithstanding these protections.

Please see the for additional information about the event contracts that CDNA offers to customers connected by Fanatics Markets IB, including the risks associated with trading in such contracts. Please also see these important disclosures in CDNA Rules provided by CDNA regarding litigation concerning certain sports-related event contracts that may affect the availability of such contracts in your state or territory. These disclosures also address the CDNA DCO policies and procedures for the liquidation or close-out of contracts and disposition of customer property in the event such litigation requires CDNA to cease offering such contracts in your state or territory.

Illustrative (and Non-Exhaustive) Event Contract Risks

Market Risk

The risk of loss in trading event contracts can be substantial and complete. The outcome of an event contract cannot be known in advance, and past performance of event contracts or markets is not indicative of future results. Your expectations may not match the outcome of the event, which can lead to unexpected losses. Further, changes in the likelihood of an underlying event may not necessarily result in a change in the price available from CDNA, which could prevent you from offsetting an existing position at a profit. Before trading event contracts, you should be prepared for the possibility of losing your entire investment.

Pricing Risk

The prices of event contracts are dependent on the market’s expected probability of events occurring, which makes some traditional derivative pricing models inapplicable to event contracts. Event contract prices may not always be reflective of the actual probabilities of the events occurring, which can lead to unexpected losses.

Source Agency Risk

Market participants’ expectations regarding an event that is the subject of an event contract may not match the outcome, which can cause unexpected losses. Contract pricing may not always reflect the actual probability that an event occurs. Data published by a designated Source Agency (as defined in the CDNA Rules) is used to determine whether the event that is the subject of an event contract has occurred. Market participants may be exposed to risk of loss if a Source Agency experiences a security breach, reports inaccurate data, or does not report data at the expected date or time. Additionally, while CFTC rules require CDNA to list only contracts that are not readily susceptible to manipulation, and CDNA prohibits trading in event contracts by certain persons who may have “inside” knowledge of, or be able to influence, the relevant event, there can be no guarantee against manipulation of the contract notwithstanding these protections.

Liquidation Risk

You might not be able to offset your position in an event contract at all or at a price that you believe is fair, including when there is insufficient volume in the opposing event contract or if the opposing event contract has insufficient bid depth. In such cases, the pricing of event contracts might not accurately correspond to the market’s prediction of the underlying event, and you would be forced to pay higher prices to offset your positions.

Trading Halt Risk

The designated contract market (the “DCM”) offering the event contracts has the authority to initiate trading halts in an emergency and, separately, if it deems this to be in the interest of its users. The DCM, through its rulebook, also has the authority to take other extraordinary measures in an emergency. The CFTC or a court can also direct the DCM to initiate a trading halt. A trading halt would prevent you from exiting your positions and could affect your portfolios and strategies.

Clearinghouse Risk

Trading event contracts also exposes you to risks associated with DCO that accepts, holds, and transfers customer funds, including the failure of the DCO’s or its designated technology service provider’s hardware and/or software and the bankruptcy of the DCO. These risks may result in trades (including offsetting trades) not being executed according to your instructions or not being accepted. you should consult the rules of the applicable DCO and/or consult the applicable DCO itself concerning the nature of protections in place to minimize these risks.

Terms and Conditions of Contracts; Modifications; Exchange Disclosures

You should review the terms and conditions of the specific event contract you are trading and associated obligations (e.g., any restrictions on partial exits and contract expiration). Under certain circumstances, specifications of outstanding contracts (including the exercise price of an option) may be modified by the exchange or clearinghouse to reflect changes in the underlying.

CDNA provides additional information regarding trading in event contracts on its platform . Fanatics Markets IB and Fanatics Markets Tech were not involved in producing and are not responsible for the content of this information.  

Regulatory and Litigation Risks

Regulators are evaluating event contract markets, and regulatory changes may adversely affect the ability of parties to offer or enter event contracts transactions, or the pricing levels at which event contracts may transact. Such changes, should they occur, could increase your costs or limit your ability to transact in material ways.

Event contracts, and particularly sports-related event contracts, currently are the subject of various litigations, and courts may interpret applicable laws differently across jurisdictions, or even in the same jurisdiction in different cases. Due to judicial orders, regulatory determinations, or legislative action, sports-related event contracts may in the future be required to cease trading in their current form, or in any form, in your jurisdiction, and could be modified, suspended, or terminated on little or no notice. You should be prepared for abrupt changes to market access, trading terms, settlement procedures, or product availability. CDNA provides information on its procedures for addressing market or product issues in its rulebook . 

Other Risks

Operational risks, including, but not limited to, those associated with human error, systems failures, cyberattack, or inadequate procedures and controls, may pose a risk to the success of your event contract trading. The occurrence or any of such risks could lead to losses.

ELECTRONIC TRADING RISK DISCLOSURE

Electronic trading and order-routing platforms operate differently from traditional open-outcry pits and manual order-entry processes. Transactions executed through an electronic system are governed by the rules and regulations of CDNA as the designated contract market, who is listing the contract. You are responsible for ensuring that your trading activity complies with the applicable procedures, policies, and trading rules of CDNA to which you submit orders. Before trading electronically, you should carefully review the governing rules of CDNA, which is the designated contract market offering access to the instruments you intend to trade. You should review the details of CDNA’s trading system to understand CDNA’s specific requirements, such as membership qualifications, termination provisions, and restrictions on order entry. CDNA utilizes an internet-based systems, which poses additional vulnerabilities arising from connectivity, third-party service providers, or delays in receiving and monitoring electronic communications.

Risks of System or Component Failure

Trading through an electronic platform exposes you to potential failures of hardware, software, or network components. A system outage could prevent you from entering new orders, modifying or cancelling existing ones, or executing transactions during a given period. Such interruptions may also result in the loss of order data or priority, which could materially affect your ability to manage positions or exposures.

Limitations of Liability

CDNA and related service providers that operate or support electronic trading systems may adopt rules that limit their liability, technology vendors, and communications providers for losses resulting from delays or system disruptions. You should review CDNA’s rules to understand the extent of protection or recovery available to you in the event of such failures.

Internet and Network Services

If you use the internet to transmit trading instructions, data, or other communications, be aware that such transmissions may be intercepted or delayed. Fanatics Markets IB disclaims responsibility for the interception, speed, accessibility, or security of any internet or network service and makes no representation or warranty as to their performance or reliability.

GEOGRAPHIC ACCESS AND SERVICE AVAILABILITY DISCLOSURE

The technology service provider that Fanatics Markets IB introduces you to for access to markets and pricing offered by CDNA is available only in certain geographic territories. Access to trading systems and related functionality is determined using geolocation technology.

If you open or hold an event contract while located in a jurisdiction where the technology service provider is operational, you should be aware that you may not be able to access, modify, or close your position if you subsequently travel to or attempt to access the platform from a jurisdiction where the technology service provider’s services are not available or authorized (for example, purchasing a contract while in Alabama but later attempting to manage that position while in New York).

You are strongly encouraged to confirm that the technology service provider’s platform will remain accessible to you for the expected duration of your trade before entering into any contract. The Firm and its affiliates do not guarantee access to trading functionality or account management features outside of supported jurisdictions.

COMMISSION, FEES, AND OTHER CHARGES

Before you begin to trade, obtain a clear understanding of all commissions, fees, and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.