HedgeStreet Exchange announced last week it will launch on 1 October and unveiled a suite of 17 options contracts ranging from currencies, gold and interest rates to health care, transportation, employment and real estate.
The privately held California company will be an Internet-based market offering binary options it calls "Hedgelets". One contract, for example, allows traders to take a position on whether prescription drug prices will rise above a certain level by expiry. Real estate options focus on mortgage rates and the several major urban real estate price indices. Its employment category includes contracts on non-farm payrolls and initial jobless claims.
"There are 22m brokerage accounts in the US and less than 100,000 of them trade derivatives," said Russell Andersson, HedgeStreet's vice president of instrument origination, and co-founder. "So we think there is a large portion of the other 21.9m that are likely to participate over time, provided it is...