UBS debuts tradable index for weather derivatives

UBS has announced a tradable benchmark for global investments in the weather derivatives market. The UBS Global Warming Index (UBS-GWI) is constructed using liquid, actively traded Heating Degree Day (HDD) and Cooling Degree Day (CDD) weather futures contracts. These futures contracts settle on the difference between the average daily temperature and a given base temperature.

Initially, the index will comprise weather futures contracts of 15 US cities traded on the Chicago Mercantile Exchange

To continue reading...