News Release

CBOT Binary Options on Target Fed Funds Rate Set Daily Volume Record

Thu Aug 10 2006

For Immediate Release

Media Contact:
Craig Grabiner
(312) 341-5758


CHICAGO, IL, August 10, 2006 – The Chicago Board of Trade (CBOT®) today announced that its Binary options on the Target Federal Funds Rate contract set a record on Wednesday, as volume rose to 1,426 contracts at the close of trading.  The new high mark topped the previous record of 769 contracts – set Tuesday, August 8 – by 85 percent.

The CBOT launched the electronically-traded Binary options on the Target Federal Funds Rate contract on July 12, 2006.  The first contract settled on Tuesday, August 8 when the U.S. Federal Reserve elected to hold the Target Federal Funds Rate at 5.25 percent.

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.  When the options expire, “in the money” options pay $1,000 to option holders, while those that are “at the money” or “out of the money” pay holders zero.  Strike prices correspond to the Target Federal Funds rate using a formula of 100-minus the actual Target rate.  Options usually expire on the last day of a regularly-scheduled FOMC meeting – they are cash-settled and based upon the most recent Target rate level.

For more information, visit the Binary Options section on

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

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