Low in the water

Freight derivatives

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Few markets illustrate the dramatic turn of events in the world economy more vividly than shipping. The Baltic Exchange Dry Index (BDI) - which measures the cost of shipping dry commodities such as coal, grain and iron ore - plunged 94% from 11,793 in May to 663 in December, leaving several shipping companies bankrupt.

Associated freight derivatives also took a pounding. The average weekly lots traded of dry bulk forward freight agreements (FFAs) - the standard derivatives contract for dry commo