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CME Group, the world's largest and most diverse derivatives marketplace, announced today the launch of four new locations for monthly and seasonal Snowfall futures and options contracts as well as new Snowfall Index Binary options contracts, scheduled to become available for trading on Monday, Dec. 7. These contracts are listed with, and subject to, the rules and regulations of CME.
The exchange is adding monthly and seasonal snowfall futures and options on futures contracts for New York LaGuardia Airport, Chicago O'Hare International Airport, Minneapolis/St. Paul Airport and Detroit Metro Airport
The futures and options on futures contracts enable market participants to manage exposure to snowfall. The binary options enable users to manage the ramifications on businesses or other operations if snowfall is more or less than anticipated. Binary options provide the options holder with a fixed dollar payout upon exercise. If the option expires without being exercised, the holder's losses are limited to the amount paid for the binary option.
"We believe the new binary options will provide customers with an efficient way to hedge potential losses on their businesses if it snows more or less than they plan. A snow removal company, for example, can better manage their loss in revenue in the event of a less-than-expected amount of snowfall during the snow-removal season," said Barry Goldblatt, Managing Director of CME Group Commodity, Energy and Metals Products.
In 2006, CME launched snowfall contracts for New York Central Park and Boston Logan International.
