CBOT Binary Options on the Target Federal Funds Rate expiring in August 2006 will be cash settled today (in accord with CBOT Regulation 2036.01) with reference to a Contract Grade Index value of 94.75. The Contract Grade Index value is based upon a target federal funds rate of 5.25 percent, as determined and published by the Federal Open Market Committee today, Tuesday, 8 August 2006.
In accord with CBOT Regulation 2042.01, for any Binary Put Option on the Target Federal Funds Rate:
| If 94.75 is strictly less than the put option strike price, holders of long positions in said put option shall receive, and holders of short positions shall pay, $1000. | |
| If 94.75 is either equal to or greater than the put option strike price, holders of long positions in said put option shall receive, and holders of short positions shall pay, nothing. |
In accord with CBOT Regulation 2042.02, for any Binary Call Option on the Target Federal Funds Rate:
| If 94.75 is strictly greater than the call option strike price, holders of long positions in said call option shall receive, and holders of short positions shall pay, $1000. | |
| If 94.75 is either equal to or less than the call option strike price, holders of long positions in said call option shall receive, and holders of short positions shall pay, nothing. |
For more information regarding the Federal Open Market Committee, please visit the website of the Board of Governors of the Federal Reserve System.
