#18 Postby StormCircus » Mon Jul 18, 2005 7:23 am
Interesting that those professors in Miami are putting that type of futures market together. Some people are willing to bet on anything. Enron had a sort of futures market for hurricanes many years ago as part of their "weather derivatives" department. This is how it worked: You basically would choose a path made up of several circles or bands of a potential track of a developing TS or hurricane. To place your bet, you would literally draw some circles on a map starting as far out as the Atlantic basin through landfall in the US or elsewhere. You'd also pay a fee to place your bet. If your hurricane track made it into your 1st circle, you'd almost break even. Into you're 2nd circle, you'd break even plus make a little money, and if it made landfall into your 3rd circle (landfall circle), you'd make a nice chunk of change. I don't know if it should really be called a "futures market" per say, because I've never thought of a hurricane as a commodity. It sounds more like parimutuel betting on weather to me. I'm curious if this is how the professors from Miami are going to set up this sort of trading platform.
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