CME to launch more weather contracts

The Chicago Mercantile Exchange (CME) is set to list weather derivatives contracts for more cities in the US and Europe and to introduce two new types of weather contracts - probably by early July. Demand for CME weather contracts is fast increasing: as of May 24, average daily contract volume for 2005 was 1,800, compared to just 377 for 2004.

The exchange plans to list contracts linked to temperatures in Barcelona, Madrid, Rome and Essen, to complement its London, Paris, Amsterdam, Stockholm and Berlin contracts. It also plans to add Baltimore, Detroit and Salt Lake City to the 15 US cities already listed. There are no additional plans for Asia at present, said CME spokesman Allan Schoenberg.

The CME is also set to launch ‘mid-seasonal’ and two-week contracts. Mid-seasonal would be user-defined seasonal indexes – basically

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