Chicago Board Of Trade: Fed Funds Options Launched

The Chicago Board of Trade (CBOT) has expanded its successful Fed Funds complex by introducing Options on CBOT®Fed Funds futures. The new contract began trading on Friday, March 14, in the open auction marketplace.

Options on CBOT Fed Funds futures offer an important risk management tool for anyone who wants to hedge against, or speculate on, changes in short-term interest rates brought about by changes in Federal Reserve monetary policy. Options on CBOT fed funds futures offer market participants an instrument with defined risk parameters that can be used to express a view on the likelihood of Fed policy changes. It can also be used in a variety of risk management applications. Financial market participants who can benefit from using these options include, but are not limited to, bond traders, hedge fund managers, portfolio managers, corporate treasurers, and bank investment managers.