Weather Derivatives

Spectron operates one of the largest global marketplaces for energy from offices in London, Singapore, Frankfurt and across the US. Spectron provides expert brokering services for global weather markets, by voice and screen, for all major locations in swaps and options including: heating degree days + cooling degree swaps, spreads, options, structured products, hurricane options, precipitation and critical day structures. Clearing is available OTC or through the CME.

Weather derivatives enable those businesses that could be adversely affected by unanticipated temperature swings or unusually high snowfall to transfer this risk. The U.S. Commerce Department has estimated that trillions of dollars of economic activity is directly affected by weather. Business earnings can be adversely impacted by summers that are hotter than normal or winters that are much colder than anticipated. Just as professionals regularly use futures and options to hedge their risk in interest rates, equities and foreign exchange, Spectron Energy’s Weather team can help your firm manage risk from extreme movements of temperature. This sector of hedging and risk management products represents today's fastest growing derivative market. In 2007, the weather derivative market’s notional value was $19.2 billion, up from 2005’s $8.4 billion.

Mike Scharfenberger +1 713 802 9097

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