The Traders New Frontier

Introduction

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Trading the Weather

The IPCC identifies three major effects climate change will have on temperature and precipitation:– Trend of warmer temperatures.– Trend of more extremes.– Trend of heavier precipitation.

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Atmospheric CO2 Concentrations from ice cores something to ponder!

According to NASA the evidence for rapid climate change is persuasive so we need to get used to it and understand the means in which we can hedge and or trade this market.

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About Weather Contracts

– Wet and Dry periods.– High and Low temperatures.– Wind.– Snow

Weather Contracts are a type of financial option that involves paying a premium for a trigger over a weather event which if triggered is paid automatically.

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What are Weather Contracts• Weather Contracts are Options or Certificates over the weather.• A Weather Contract is an over-the-counter financial product, which allows you

to receive an agreed amount if certain climatic events occur during the term of your Weather Contract.

• The events are based on third party weather data for the Weather Station and are chosen by you.

• If the chosen events do not occur, then the Weather Contract lapses or expires without any payment. You will have paid the Premium for the Weather Contract and received no payout.

• You can only take “long” positions. You profit when an agreed weather event occurs and if the weather event does not occur then you simply do not get any further payment.

• You are not liable to make any further payment after you have paid the Premium Amount. This Premium amount is all you can loose.

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How to trade the Weather

• Look for a weather event of interest.• Define the risk period.• Log on to QUOTE PRO.• Input the parameters of the trade.• Analyse the data.• If all good buy it.• Wait for the event to unfold.

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Our Trading Platform

• Weather Data from regions within over 20 countries.

• Weather Indexes on specific strategies you are looking at for analysis.

• QuotePro Pricer.• Execution Platform and Account information.• The ability to monitor contracts and payouts

when they occur.

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Our Trading Platform

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Lets Look at Strategy

• Check out the forecasts. Get on the BOMs mailing list.

• Look for events of interest ie El Nino• Two main types of strategies:– Event driven contracts like rain days and heat days

over a risk period.– Accumulative rain and temps like a wet hot

summer during January.• In put the data analyse and then buy if all

looks good.

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Education about trading the weather

• Revise the educational “Flip Books” to make sure understand the products.

• Read the Product Disclosure Document• Read the Financial Services Guide and Terms of Trade• Complete Client Agreement Form• Send it to us– Client Service – GPO Box 268 – Sydney NSW 2001

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Any Questions?

• Jonathan Barratt• CEO Weather Trading• +612 9994 8009

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Free On Line – Seminar Monday 26th Oct starting

at 6pm.