Baiting the hook

End-users such as utilities and industrial companies are not showing the same keenness as hedge funds for trading weather derivatives, despite the efforts of banks, dealers and brokers to lure them in. By Joe Marsh

There are huge untapped potential volumes in the weather derivatives market, but what will it take to get more energy companies and industrial groups hedging their weather exposure? Brokers, banks and other weather derivatives dealers are trying various methods to lure such businesses in.

Some feel an active spot market might help. But others believe the weather will have to have a clear effect on the bottom line before many firms will become active in the weather market.
“The big changes