I have some uninvested cash in an IRA, and I have opinions about upcoming political developments that are tracked in prediction/betting markets. Is there a way for me to invest IRA funds into these markets?

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    Have you tried to ask your current IRA custodian if they have suitable products that they offer for investing IRA money in these markets? – Dilip Sarwate Oct 29 '16 at 13:45
  • ... their answer will probably be "no, too risky", but I agree the question is what your IRA offers. – keshlam Oct 29 '16 at 14:50
  • @DilipSarwate My current custodian doesn't, no, but it also doesn't offer investments such as precious metals (at least directly). I'm more asking about whether there's any precedent on eligibility. – chrylis -cautiouslyoptimistic- Oct 29 '16 at 21:41

Some IRA custodians offer "self directed IRAs" also commonly known as IRAs with "Chceckbook control", meaning you have a checkbook that draws on the IRA funds to write to other investments. This is not the right forum to recommend specific providers.

These are most often used to buy real estate - e.g. whole buildings. You can't use them to buy artwork, collectibles or rare coins (but you can use them to buy American Eagles and physical bullion). I can't tell if prediction markets have been tested, but as a financial derivative without a physical aspect, it seems like the IRS wouldn't care.

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  • I'm aware of the self-directed account options but more curious whether anyone knows of any previous precedent regarding eligibility for the specific use. – chrylis -cautiouslyoptimistic- Oct 29 '16 at 21:42
  • Political predictions markets specifically might be subject to more scrutiny, since betting on elections in the US is generally illegal, and the legal predictions markets operate under waivers that subject them to certain restrrictions (e.g., capping the amount of money that can be invested in any given market). Overall, though, I think the rise of prediction markets is new enough that well-defined answers to this kind of question do not yet exist. – BrenBarn Oct 30 '16 at 20:58

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