What is the target rate for binary options

CBOT Launches Binary Options on Target Federal Funds Rate

In Junea record 2, Financial options were traded electronically at the CBOT — more than 93, contracts per day and more than three times greater than June For example, a Target Federal Funds Rate of 5.

Binary Options Trading: What is it?? How does it work??

The options will expire on the last day of a regularly-scheduled FOMC meeting. Binary options on the Target Federal Funds Rate trade from p.

Binary options pay out depending on the outcome of a simple "yes or no" proposition, making them clear-cut yet flexible trading tools.

CT Sunday through Friday. Trading in expiring options ends at CT on the final trading day. The Exchange has contracted with two firms to provide two sided markets for the new contract during daytime hours.

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About the CBOT As one of the leading global derivative exchanges, the Chicago Board of Trade provides a diverse mix of financial, equity and commodity futures and options-on-futures products.

Building on its year history, the CBOT continues to advance into the future using the strength of deep liquidity, market integrity and member-trader expertise.

The new high mark topped the previous record of contracts — set Tuesday, August 8 — by 85 percent. The first contract settled on Tuesday, August 8 when the U. At expiration, Binary options on the Target Federal Funds Rate contracts have two possible outcomes — final settlement is either a fixed dollar amount or nothing at all.

Using superior trading technology in both electronic and open-auction trading platforms, the CBOT provides premier customer service to risk managers and investors worldwide. For more information, visit our website at www.

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These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements.

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More detailed information about factors that may affect our performance may be found in filings made by CBOT Holdings, Inc. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Binary options on the Fed funds target are an interesting exception where there is a clear rationale for a binary rather than a vanilla option. The key instrument that the Fed uses is the Fed Funds target. This is essentially a target that the Fed sets for the overnight inter bank interest rate.

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