Weather risk
Weather option pricing with transaction costs
The weather derivatives market is becoming more liquid, and dynamic hedging of weather options with weather swaps is now possible, though limited by transaction costs. Here Stephen Jewson investigates the effect of such hedging on option pricing
Exchanges eye weather
New exchanges are entering the weather risk arena despite Liffe’s failure to successfully market its European weather futures. But while the US exchanges appear bullish, European entrants are treading cautiously. Paul Lyon reports
Getting a grip on the market
Innogy, a US energy company, is well placed to take advantage of the rewards that weather trading can offer. Eurof Thomas finds out the secret of its success
Aquila’s troubles could break emerging markets risk
Confusion at the weather derivatives operations of energy giant Aquila is having a knock-on impact on the development of weather products in emerging markets around the world. Paul Lyon reports
A change in atmosphere
The overall condition of the weather derivatives market is in flux, but there are still plenty of financial institutions who don’t mind a mixed forecast. By Navroz Patel, with additional reporting by Paul Lyon
Canada opens new pastures
Alberta’s Agricultural Financial Services Corp came to Aon with a special need to hedge precipitation risk, and Aon rose to the challenge. The transaction uses a unique index. Catherine Lacoursiere reports
European info squall to clear
At last, weather data is starting to become available in the European market, spurring growth in the weather derivatives market there. Paul Lyon reports
How Japan got it covered
The fast-growing Japanese weather derivatives market is unique in both its product diversity and the range of small business end-users it serves. But where are the big players? Rob Dwyer reports