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- The futures contract, linked to the current price of water, is set to trade on Wall Street for the first time this week.
- CME Group is launching the deal, which is linked to California’s 1.1 billion California spot water market.
- Farmers and investors alike can avoid water contracts or rely on the possibility of water shortages.
- A high-profile investor who can focus on investing in water contracts: “The Big Short.” Of Michael Bury.
- Visit Business Insider’s homepage for more stories.
CME Group will launch futures contracts linked to spot water prices for the first time this week.
The agreements allow investors and farmers to rely on future water prices together. The deals are tied to California’s 1. 1.1 billion California spot water market.
When Water officially joins the purchase of gold, oil and other commodities on Wall Street, the agreements will be settled financially. This means that contract buyers, who hold on to expiration, will not be welcomed by the distribution of millions of gallons of water, as they would for other commodity-based futures such as oil and grain.
The water agreement is linked to the Nasdaq Wales California Water Index, which was launched two years ago. The index is driven by volume-weighted averages of bargain prices in California’s five largest and most actively traded water markets.
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The contract will represent every 10 acre-feet of water, equivalent to about 3.26 million gallons.
Probably a new profile investor. The new Lockard Water futures contract is looking to earn is “The Big Short.” No. Michael Burry.
In the wake of the Great Depression of 2008, Barry highlighted water as one of the top ideas of his investment, as he seeks to continue to climb natural resources that sustain life as supply declines due to population growth and climate change.
But, potentially investors will use water contracts rather than investors, as they look to save their input costs amid an environment of increasing uncertainty.
The CME group initially announced the launch of water futures in September.
“Nearly two-thirds of the world’s population is expected to face water scarcity by 2025. Water scarcity is a threat to businesses and communities around the world, and especially to the 1.1 billion California water market.” Head of equity index and products of alternative investments.
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