CME Group expands package of temperature-based products to include the Australian cities of Melbourne, Sydney and Brisbane.
The new listings will begin trading on Monday, 23 February 2009, and include Heating Degree Day (HDD) and Cooling Degree Day (CDD) contracts on both Monthly and Seasonal futures and options. The contracts will trade on a monthly basis from January through December and will be priced in Australian dollars.
With the addition of these new contracts, CME Group now offers weather contracts based on aggregate temperatures for 45 cities, including 24 throughout the U.S., 10 in Europe, six in Canada, three in Australia and two in Japan. CME Group also lists products used to hedge risk associated with hurricanes, snowfall and frost. Trading volume in CME Group weather derivatives reached 776,397 contracts in 2008.
“We continue to work closely with a broad group of customers, including energy companies, retailers and municipalities to develop and expand our weather derivative products to help manage their weather-related risk,” says Felix Carabello, director of Alternative Investment Products, CME Group.
“Like our other temperature-based products, these Australian contracts enable industries that face business uncertainty as a result of unusually hot or cold temperatures to transfer their risk exposure to the capital markets.”
L.D.