CHICAGO, Oct. 14 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, announced today that it will begin listing and trading rainfall futures, options on futures and binary options beginning October 31 for trade date November 1. The monthly and seasonal contracts will be based on the CME Rainfall Index and will be available March through October. These contracts will be listed with, and subject to, the rules and regulations of CME.
"We see the impact of weather every day in our lives and we know how it can influence regional and local business decisions – whether to raise prices, divert inventory or result in temporarily closures," said Tim Andriesen, CME Group's Managing Director of Agricultural Commodities and Alternative Investments. "A significant number of industries, from agribusiness to recreation, are reliant on good weather, but also are at the mercy of bad weather. Rainfall contracts, in conjunction with our existing suite of weather products, will allow these businesses to manage the resulting risk."
"CME Group's commitment to expand their product offerings in the weather space has enabled our clients to gain access to financial risk mitigation tools previously only available to large, commercial end-users in the over-the-counter market," said Jeff Hodgson, President of Chicago Weather Brokerage. "The rainfall contracts are a viable hedging tool for large agricultural market participants, as well as smaller industries that are equally affected by weather."
The rainfall contract locations include Chicago O'Hare International Airport, Dallas-Fort Worth International Airport, Des Moines International Airport, Detroit Metro Airport, Jacksonville International Airport, Los Angeles Downtown USC Campus, New York LaGuardia Airport, Portland International Airport and Raleigh/Durham International Airport.
The futures and options on futures contracts enable market participants to manage exposure to rainfall. The binary options enable users to manage the ramifications on businesses or other operations if rainfall is more or less than anticipated. Binary options provide the options holder with a fixed dollar payout upon exercise. If the option expires without being exercised, the holder's losses are limited to the amount paid for the binary option.
CME Group's weather product suite offers trading opportunities related to rainfall, temperature, snowfall, frost and hurricanes. The products are based on a range of weather conditions in more than 47 cities in the United States, Europe, Canada, Australia and Asia, with the hurricane products geared to nine U.S. regions. For more information about CME Group weather products, visit http://www.cmegroup.com/weather.
As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the largest central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort®. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.
The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex, E-mini and CME ClearPort are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (Nasdaq :CME ) and its products can be found at www.cmegroup.com.
SOURCE CME Group