Brazil Stock Guide – B3 S.A. (B3: B3SA3) launched new international Monetary Policy Options on December 17, allowing investors to trade expectations around interest rate decisions by the U.S. Federal Reserve, the European Central Bank and Mexico’s central bank, extending a model first introduced domestically with Brazil’s Copom Options five years ago.
The new products are structured as Financial Event Contracts, a category designed to let investors express views on discrete macroeconomic outcomes rather than continuous price movements. According to B3, the contracts enable trading on whether benchmark rates will be maintained, cut or raised, and by how much, in upcoming policy meetings of major central banks whose decisions ripple across global asset markets.
Portfolio expansion, global scope
The three new contracts cover decisions by the U.S. Federal Reserve (ticker: FED), Mexico’s central bank (ticker: TOM) and the European Central Bank (ticker: DFE). Each option’s premium trades on a scale from 0 to 100 points, directly reflecting the probability the market assigns to a given policy outcome. Each point corresponds to one unit of the local currency — U.S. dollar, Mexican peso or euro — while each strike represents a possible rate move.
“The Copom Options were an innovative interest-rate derivative when we added them to our portfolio,” Felipe Gonçalves, B3’s superintendent of products, said in a statement. “We are now expanding that portfolio to meet market demand for trading other monetary policy decisions that have a global economic impact.”
From hedging to signal extraction
Beyond directional trades, B3 positions the contracts as expectations indicators, translating collective market views on central bank decisions into transparent, exchange-traded prices. As with Copom Options, the standardized structure and on-exchange clearing are designed to broaden access while reducing counterparty risk.
“These are standardized products, traded in the exchange environment, transparent and capable of expanding the range of strategies available for portfolio protection,” Gonçalves added.
Binary payoff, defined risk
At initiation, the option holder pays — and the option writer receives — a premium between 0 and 100 points. If the specified monetary policy scenario materializes at maturity, the option is exercised and pays out the full 100-point value. If not, there are no additional payments, limiting gains or losses to the initial premium exchanged.
Trading remains open until the end of the session on the day the relevant central bank announces its rate decision, with settlement occurring on the next business day. The design mirrors Brazil’s Copom Options framework, now adapted to a broader set of global policy anchors.
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