Polymarket vs QCEX: CFTC-Regulated Prediction Markets Compared

In late 2024, a major shift occurred in the prediction market landscape: Interactive Brokers acquired ForecastEx and rebranded it as QCEX—the first CFTC-regulated prediction market exchange available to US traders. This guide compares QCEX with Polymarket to help you choose the right platform.

What Is QCEX?

QCEX (formerly ForecastEx) is a prediction market platform acquired by Interactive Brokers for $112 million in 2024. Unlike Polymarket, QCEX operates as a CFTC-regulated Designated Contract Market (DCM), making it the first fully compliant prediction market available to US residents.

The platform allows traders to speculate on economic events, elections, and other real-world outcomes using event contracts—binary options that pay $1 if an outcome occurs and $0 if it doesn't.

Quick Comparison: Polymarket vs QCEX

Regulatory Status: The Key Difference

Polymarket's Regulatory Position

Polymarket operates outside the US regulatory framework after settling with the CFTC in 2022. The platform paid a $1.4 million fine and agreed to block US users. For international traders, this offshore status means fewer restrictions but also less regulatory protection. Learn more in our guide on Polymarket's legal status.

QCEX's CFTC Approval

QCEX operates as a CFTC-designated contract market, the same regulatory status as the Chicago Mercantile Exchange (CME). This means:

• Full US legality: No VPNs or geographic workarounds needed
• Customer protection: Regulated custody and segregated funds
• Tax clarity: 1099 reporting and clear Section 1256 treatment
• Institutional access: Banks and funds can legally participate

Market Coverage Comparison

Polymarket Market Types

Polymarket offers extensive market coverage across categories:

• Politics: Elections, policy decisions, appointments (election trading guide)
• Crypto: Price targets, ETF approvals, regulatory actions (crypto markets guide)
• Sports: Championships, awards, player moves
• Pop culture: Awards shows, entertainment events
• Science: Climate, space exploration, technology milestones
• Business: Earnings, M&A, CEO changes

QCEX Market Types

QCEX focuses primarily on economic and financial events:

• Fed decisions: Interest rate targets, policy announcements
• Economic data: CPI, employment reports, GDP
• Elections: Presidential, congressional outcomes
• Regulatory actions: Government policy decisions

QCEX's market selection is more limited but focused on events with clear economic relevance—the types of markets institutional traders care about.

Liquidity and Trading Experience

Polymarket Liquidity

Polymarket has significant liquidity advantages:

• $1+ billion traded in 2024 US election markets alone
• Deep order books on major markets
• Active market making community
• Tight spreads on popular markets (often 1-2%)

Track the biggest traders using whale tracking tools to understand where liquidity flows.

QCEX Liquidity

As a newer platform, QCEX has less retail liquidity but offers unique advantages:

• Interactive Brokers integration brings institutional flow
• Professional market makers from traditional finance
• Growing liquidity as US traders migrate from offshore platforms
• Spreads currently wider but improving

Fee Structure Comparison

Polymarket Fees

Polymarket's fee structure is straightforward. For complete details, see our fees guide:

• ~2% fee on net profits at market resolution
• No trading fees (maker/taker)
• Gas fees for blockchain transactions (usually minimal on Polygon)
• Deposit/withdrawal fees depend on method

QCEX Fees

QCEX uses a traditional per-contract fee model:

• $0.25-1.00 per contract (varies by market)
• Fees charged on both entry and exit
• No profit-based fees
• Standard brokerage wire/ACH fees for deposits

For high-conviction, large-size bets, Polymarket's profit-based fee may be cheaper. For frequent trading with smaller profits, QCEX's flat fees could work out better.

Account Setup and Funding

Polymarket Account Setup

Getting started on Polymarket requires crypto familiarity:

1. Create or connect a crypto wallet (MetaMask, Coinbase Wallet, etc.)
2. Complete KYC verification for higher limits
3. Deposit USDC via card, bank transfer, or crypto bridge
4. Start trading immediately

See our USDC deposit guide and getting started guide for detailed instructions.

QCEX Account Setup

QCEX requires a traditional brokerage account:

1. Open an Interactive Brokers account (or use existing)
2. Complete standard brokerage KYC/AML verification
3. Enable event contract trading permissions
4. Fund via ACH, wire, or account transfer
5. Access QCEX through IBKR platform

The process is more familiar to traditional traders but takes longer (typically 1-3 days) compared to Polymarket's near-instant setup.

Tax Treatment

Polymarket Tax Implications

Polymarket profits are generally treated as capital gains or gambling income depending on jurisdiction. US users face additional complexity since the platform is technically off-limits. See our 2025 tax guide for details.

QCEX Tax Treatment

QCEX contracts may qualify for favorable Section 1256 tax treatment:

• 60/40 rule: 60% long-term, 40% short-term capital gains
• Max effective rate: ~26.8% vs. up to 37% for short-term
• 1099 reporting: Broker provides year-end tax documents
• Loss carrybacks: Up to 3 years for Section 1256 contracts

Consult a tax professional to confirm Section 1256 applicability for specific QCEX contracts.

Arbitrage Opportunities

With two major prediction markets offering similar events, arbitrage opportunities emerge:

• Price discrepancies: Same event priced differently across platforms
• Liquidity arbitrage: Better prices available on one platform
• Regulatory arbitrage: US traders can now legally access prediction markets via QCEX

International traders with access to both platforms can potentially profit from price differences, though execution and settlement timing differences add complexity.

Which Platform Should You Choose?

Choose Polymarket If:

• You're based outside the United States
• You want access to diverse market categories (sports, crypto, pop culture)
• You prefer crypto-native infrastructure and on-chain transparency
• You want to follow whale traders and use copy trading strategies
• You need deep liquidity on major political events
• You're comfortable with crypto wallets and USDC

Choose QCEX If:

• You're a US resident wanting legal prediction market access
• You prefer regulatory protection and fund segregation
• You want clean 1099 tax reporting and potential Section 1256 benefits
• You already have an Interactive Brokers account
• You focus on economic/financial events
• You're an institution or fund that needs compliance

The Future of US Prediction Markets

QCEX's launch signals growing acceptance of prediction markets by US regulators. This could lead to:

• More CFTC-regulated prediction market exchanges entering the space
• Potential pathway for Polymarket to re-enter the US market with proper licensing
• Increased institutional participation and liquidity
• Integration with traditional financial products

For now, international traders have the advantage of accessing Polymarket's deeper liquidity and market variety, while US traders finally have a legal on-ramp through QCEX.

Conclusion

Polymarket and QCEX serve different audiences with different needs. Polymarket remains the dominant global prediction market with unmatched liquidity and market variety, but requires international residency. QCEX provides US traders their first legal option with regulatory protection and tax clarity, though with more limited markets and liquidity.

If you have access to both, consider using each for its strengths: Polymarket for diverse markets and liquidity, QCEX for US-specific events and tax advantages. And watch for arbitrage opportunities between them.

For other platform comparisons, see our guides on Polymarket vs Kalshi and Polymarket vs PredictIt.