Hedge Street to Launch Exchange for Options

Hedge Street Inc., founded by Portola Valley, Calif.-based investment company Pareto Partners, got approval from the Commodity Futures Trading Commission to start an electronic exchange offering options on single events.

Investors will be able to use the exchange to bet on or guard against events or indexes that do not have an underlying market, such as economic indicators, according to documents posted on the CFTC website.

Hedge Street hasn’t said what contracts it will offer or when it will start.

Regulators approved the new market Wednesday, CFTC spokesman David Gary said Thursday.

Hedge Street officials declined to comment.

Futures are agreements to buy or sell an asset at a set date and price; options are the right to do so.

At Hedge Street, traders will pay $10 for a “bundle” consisting of an option to buy and an option to sell, which will cover the possible outcomes of a particular event, according to the CFTC website.