
Zipspeed launches daily mark-to-market weather index
Zipspeed is looking to launch Nordix on a regulated exchange in the US, but has not ruled out working with a non-US exchange. The company has spoken to the Kansas Board of Trade and the Chicago Mercantile Exchange, as well as brokers Cantor Fitzgerald and Brokertec, but has made no commitment to any of these companies, Parker added. The exchange launch will not happen for several months.
The index will be geared to trading temperature and precipitation measures, with sunlight and windspeed measures to be added later. The US government's National Climate Data Center will supply weather data.
Parker believes existing weather derivative contracts are too customised to form the basis of a liquid market. He said heating/cooling degree-day derivatives – the most commonly traded weather contracts - are geared towards the energy sector, to the exclusion of other industries. He believes Nordix, by incorporating a range of weather measures into a single index, should overcome this restriction and help the weather risk market to become more generic.
“Our belief is that hedge funds, for example, will be eager to use this index because it provides a liquid market unconnected to other risks they may have, which makes it an ideal hedge,” he added.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact [email protected] to find out more.
You are currently unable to copy this content. Please contact [email protected] to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
More on Exchanges
Regulation
What lies beneath: Nomura’s iceberg balance sheet
Collateral received by the Japanese bank exceeds its total on-balance-sheet assets – does it matter?
Receive this by email