Top Hedge Fund News, Member Posts, Hedge Fund Daily Indices and more!

3yrs ago Hedge Fund dealbreaker Views: 396

You can bet on anything on Wall Street these days.

This story is brought to you by The Daily Upside. For more crisp and insightful content, you can sign up for the free Daily Upside newsletter here.

This story brings new meaning to the term: swimming in money.

Wall Street, tapping into its ability to put a price tag on anything, has launched a way to bet on the price of water.

Water World

Yesterday the Chicago-based CME Group launched a futures contract tied to the Nasdaq Veles California Water Index.

For those whose knowledge of the water market ends with Poland Spring and Dasani, the Nasdaq Veles Index was established in 2018 to set the benchmark price of water in California. The index measures the volume-weighted average of water transaction prices in the state’s five largest water markets.

Why California? With high-volume activities like almond and pistachio farming and celebrities watering their lawns during a drought, California is the largest water market in the U.S. by a multiple of four.

The futures contracts will be financially settled, meaning buyers won’t need a second pool to take delivery. The contracts began trading yesterday under the ticker NQH20.

Why It Matters

Until now, farmers had no way of hedging their exposure to the price of water. Should prices soar during the wrong season, they could be financially drained. According to CME, the futures will help water users manage risk and better align supply and demand.

The futures market will also serve as a scarcity gauge for investors and other interested parties.

  • Two billion people live in nations with water shortages, and nearly two-thirds of the world could face a shortage in the next half decade.
  • An analyst at RBC Capital Markets told Bloomberg, “Climate change, droughts, population growth, and pollution are likely to make water scarcity issues and pricing a hot topic for years to come.”

The Takeaway: If anyone has seen James Bond’s “Quantum of Solace,” you can imagine how this goes wrong.


Today's Hedge Fund Headlines:

Log In for More
Access Over 250K+ Industry Headlines, Posts and Updates
Not a member yet?

Join AlphaMaven

The Premier Alternative Investment
Research and Due Diligence Platform for Investors

Free Membership for Qualified Investors and Industry Participants
  • Easily Customize Content to Match Your Investment Preferences
  • Breaking News 24/7/365
  • Daily Newsletter & Indices
  • Alternative Investment Listings & LeaderBoards
  • Industry Research, Due Diligence, Videos, Webinars, Events, Press Releases, Market Commentary, Newsletters, Fact Sheets, Presentations, Investment Mandates, Video PitchBooks & More!
  • Company Directory
  • Contact Directory
  • Member Posts & Publications
  • Alpha University Video Series to Expand Investor Knowledge
  • AUM Accelerator Program (designed for investment managers)
  • Over 450K+ Industry Headlines, Posts and Updates
ALL ALPHAMAVEN CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. CONTENT POSTED BY MEMBERS DOES NOT NECESSARILY REFLECT THE OPINION OR BELIEFS OF ALPHAMAVEN AND HAS NOT ALWAYS BEEN INDEPENDENTLY VERIFIED BY ALPHAMAVEN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THIS IS NOT A SOLICITATION FOR INVESTMENT. THE MATERIAL PROVIDED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY INTERESTS OF ANY FUND OR ANY OTHER SECURITIES. ANY SUCH OFFERINGS CAN BE MADE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE INVESTMENT'S PRIVATE PLACEMENT MEMORANDUM. PRIOR TO INVESTING, INVESTORS ARE STRONGLY URGED TO REVIEW CAREFULLY THE PRIVATE PLACEMENT MEMORANDUM (INCLUDING THE RISK FACTORS DESCRIBED THEREIN), THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION DOCUMENTS, TO ASK SUCH QUESTIONS OF THE INVESTMENT MANAGER AS THEY DEEM APPROPRIATE, AND TO DISCUSS ANY PROSPECTIVE INVESTMENT IN THE FUND WITH THEIR LEGAL AND TAX ADVISERS IN ORDER TO MAKE AN INDEPENDENT DETERMINATION OF THE SUITABILITY AND CONSEQUENCES OF AN INVESTMENT.