Thursday, January 7, 2010

Weather Derivatives Trading Which Of These Derivatives, In Your Opinion, Is Best Suited To Providing Protection Against Weather Related?

Which of these derivatives, in your opinion, is best suited to providing protection against weather related? - weather derivatives trading

Which of these derivatives, which he believes is best suited to provide protection against weather-related risks? Why?

Posted by Tracey Lust at 10:30 PM

2 comments:

  1. The ShepherdJanuary 11, 2010 at 4:10 PM

    Future.

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  2. Andrew OJanuary 11, 2010 at 11:22 PM

    Contracts lock yourself in a price, there are risks for the top and bottom are. Options allow both below market rates during the year to buy, but they are no longer valid when a disaster does not happen. The question is, you know you need something at a certain time? If yes, proceed with a forward price to ensure all charges. Ultimately, more hypothetical. You'll never pay more than the current market rate at maturity, but may never too precious, and you lose the opportunity cost.

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