The market allowed the utilities to sell weather futures
Then in 1999, the Chicago Mercantile Exchange (CME) started to trade weather futures
contracts, spurring the expansion of this nascent sector.
while the hedger using linear basis hedging (hedging using the combination of exchange traded weather futures
and OTC basis weather forwards) has a final wealth given by
From the same people who run weather futures
trading, the hurricane futures market could prove to be a viable tool for reinsurers.
Options on all CME weather futures
will be traded on CME's trading floor from 8:30 a.
made their debut Wednesday on the Chicago Mercantile Exchange, enabling investors to speculate on what the temperature is going to be in four U.
Weather Forecasting Using Weather Futures
Presented by:Ben Smith, President, First Enercast Financial
16 /PRNewswire-FirstCall/ -- CME, the world's largest and most diverse financial exchange, announced today that it will expand its weather futures
and options product suite to include weather contracts on six Canadian cities.
Later in the same year, the London International Financial Futures Exchange introduced weather futures
that now allow Europeans to hedge against their respective weather conditions.
This capacity increased the open interest on the Chicago Mercantile Exchange (CME) by 588%, the largest-ever volume for a specific weather futures
contract in any one city on a given day.
Backed by CME Clearing, CME weather futures
provide the safety and soundness investors are seeking to manage their weather-related risk.
He was there when the CME was growing the weather derivative market in its early years; he's launched three different types of weather indices and he has been one of the central figures in the growth of the weather futures
market," said David Riker, President and CEO of Storm Exchange.