.jpg)
CME, the world's largest and most diverse financial exchange, announced today that it will expand its weather futures and options product suite to include weather contracts on six Canadian cities. Beginning November 6, weather futures and options on futures will be available for Calgary, Edmonton, Montreal, Toronto, Vancouver and Winnipeg.
"Weather is one of the largest variables impacting economic activity and business performance," said Felix Carabello, Director, CME Alternative Investment Products. "CME weather futures contracts provide the marketplace with important hedging tools that allow businesses worldwide, such as construction, energy, retail and transportation companies, to manage their exposure to the elements."
The new Canadian listings will include Heating Degree Days (HDD) and Cooling Degree Days (CDD) on both monthly and seasonal index futures and options. Product specifications are identical to the existing U.S. and European cities with Canadian cities priced in Canadian dollars.
The futures contracts will trade only on the CME Globex(R) electronic trading platform from 5 p.m. to 3:15 p.m. Chicago time the following day. Trading on all of the contracts will terminate at 9 a.m. Chicago time on the first Exchange business day that is at least two calendar days after the last calendar day of the respective contract period. Options on all CME weather futures will be traded on CME's trading floor from 8:30 a.m. to 3:15 p.m. Chicago time.
Also beginning November 6, CME is adding futures and options on futures of seasonal strip snowfall indexes for Boston and New York City. The strips allow investors to trade up to six months (but no less than two) of snowfall contracts in one trade. Snowfall futures and options began trading in March 2006.
CME currently lists weather contracts based on aggregate temperatures for 28 cities, including 18 throughout the U.S., eight in Europe and two in Japan. CME introduced weather derivatives in 1999. In 2005, 860,000 weather contracts worth a notional value of $36 billion traded at CME.
CME ( http://www.cme.com ) is the world's largest and most diverse financial exchange. As an international marketplace, CME brings together buyers and sellers on the CME Globex(R) electronic trading platform and on its trading floors. CME offers futures and options on futures in these product areas: interest rates, stock indexes, foreign exchange, agricultural commodities, energy, and alternative investment products such as weather, real estate and economic derivatives. CME is a wholly-owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, NASDAQ: CME), which is part of the Russell 1000(R) Index and the S&P 500(R) Index.
