Commodity derivative markets newest and boldest contract " HEDGE STREET BINARY OPTIONS CONTRACTS" will it be the most sucessfull every ?
HedgeStreet is an Internet-based government regulated (CFTC) derivatives exchange where traders can hedge against or speculate on economic events and price movements.
HedgeStreet targets retail speculators and hedgers by offering $100 contracts. The CBOE owns a minority interest in HedgeStreet.
HedgeStreet offers a variety of contracts designed to give private individuals the ability to manage the particular risks they face.
HedgeStreet's contracts span a range of markets, from commodities and currencies to economic indicators, employment, fuel, housing prices, inflation, hurricane insurance estimates, and interest and mortgage rates. HedgeStreet members can use the site to put in order entries, find out about market depth, historical data, and position reporting.
Although the liquidity on HedgeStreet contracts is low as of this submission, as a regulated exchange that offers binary option contracts--a contract format which they pioneered--they do add value in the derivatives marketplace.
Liquidity for the exchange has recently risen due to the $10 million investment by market makers Susquehanna International Group (SIG) and DRW Trading Group in March of 2007.
Based in San Mateo, California, the company is subject to regulatory oversight by the Commodity Futures Trading Commission. Membership is only open to people residing in the United States. Member funds are held at the Union Bank of California.
What is a binary Option ?
A binary option is a type of option where the payoff is either some fixed amount of some asset or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. Thus, the options are binary in nature because there are only two possible outcomes. They are also called all-or-nothing options or digital options.
For example, suppose I buy a binary cash-or-nothing call option on XYZ Corp's stock struck at $100 with a binary payoff of $1000. Then if at the future maturity date, the stock is trading at or above $100, I receive $1000. If its stock is trading below $100, I receive nothing.
In the popular Black-Scholes model, the value of a digital option can be expressed in terms of the cumulative normal distribution function.
Thursday, July 19, 2007
can there be a derivative exchange for Intellectual proprieatry rights ?
Derivatives Exchange for IP rights ?
Current methods of intellectual property exchange are inefficient and often hinder companies from easily realizing value from existing IP assets. In addition, intellectual property enforcement is costly and uncertain and entails lengthy negotiations or legal actions.
As a result, necessary IP rights are not effectively transferred, the “best price” for IP is rarely achieved, and the process itself inhibits the market adoption of new technology based products and hence their companies’ economic growth.
What is Intellectual capital ?
Intellectual capital is a term with various definitions in different theories of economics. Accordingly its only truly neutral definition is as a debate over economic "intangibles". Ambiguous combinations of instructional capital and individual capital employed in productive enterprise are usually what is meant by the term, when it is used to actually refer to a capital asset whose yield is intellectual rights.Such use is rare, however, and the term rarely or never appears in accounting proper - it refers to a debate, and to the assumed capital base that creates intellectual property, rather than an auditable style of capital.
Perhaps due to their industry focus, the term "intellectual capital" is employed mostly by theorists in information technology, innovation research, technology transfer and other fields concerned primarily with technology, standards, and venture capital.
It was particularly prevalent in 1995-2000 as theories proliferated to explain the "dotcom boom" and high valuations. During this period it was often observed that computer code and programmers were bearing a substantial premium when combined in new unproven companies.
It is hard to see how this differs from the tulip boom, however, when it would have been just as likely to assign a high value to the seemingly-magical combinations of tulip bulbs and, say, the pots they grew in.Brand as an AssetWhether flags, brands, labels or simple fear dominate economic decisions, it seems that the underlying theories of intellectual capital and of human capital don't explain them.
When attached to "capital" as prefixes, the terms "intellectual", "knowledge" and "human" often conceal more than their use can reveal. Thus the terms intellectual capital, knowledge capital and human capital more properly describe debates, not assets, as internally generated assets do not appear on a balance sheet, however International Financial Reporting Standard 3 on Business Combinations requires acquired intangible assets to be accounted for during the purchase price allocation exercise.
They produce neat abstractions but so far poorly explain what actually occurs in the biologically real world: individuals buying in a social setting based on instructions.So far, the more specific terms "individual", "instructional" and "social" from human development theory, have been preferred in Wikipedia as adjectives describing classes of capital. In part this is because these terms have definitions that arise from academic categories and practices rather than faddish marketing or management theories.
There are standards for assigning value to these, e.g. the UN Human Development Index which literally ranks flags (of countries) for quality of life.Extending such standards to labels (via mandatory labelling) and applying them positively in brand management, e.g. positioning a brand for appeal to an ethical minority, is increasingly common.
Projects by Consumerium and AdBusters seek to make comprehensive outcomes more important in buying decisions. This in turn is part of a trend towards more moral purchasing.When viewed as an asset, then, a brand is simple social capital that may have an increasing amount of instructional capital attached to satisfy an ever-rising demand for more information about product origin, production and distribution.
Why should any asset be intangeible ?
Intangible assets are defined as those non-monetary assets that cannot be seen, touched or physically measured and which are created through time and/or effort.
There are two primary forms of intangibles - legal intangibles (such as trade secrets (e.g., customer lists), copyrights, patents, trademarks, and goodwill) and competitive intangibles (such as knowledge activities (know-how,knowledge), collaboration activities, leverage activities, and structural activities.
Legal intangibles generate legal property rights defensible in a court of law. Competitive intangibles, whilst legally non-ownable, directly impact effectiveness, productivity, wastage, and opportunity costs within an organization - and therefore costs, revenues, customer service, satisfaction, market value, and share price.
Human capital is the primary source of competitive intangibles for organizations today. Competitive intangibles are the source from which competitive advantage flows, or is destroyed.
The development of new IP exchange practices ultimately may lead to the creation of an operating Intellectual Property Rights Exchange in the future, providing for the efficient open market trading of various direct(spot/cash) and derivative IP-based license, debt equity and hybrid investments.
Such an exchange could bring together IP owners, consumers and investors with a solution for current market inefficiency and provide companies with a mechanism for funding additional innovation, reducing their exposure to legal actions, and increasing their access to underutilized patents and technologies. The objective that as a result, faster commercialization of technology will accelerate long-term economic growth.
Different types of trading activities may be developed, bound by the common principles of consistent transaction termsand market pricing. Transactions might be for license rights (e.g., for a specific quantity of production), for ownership rights (e.g., via an open auction), or for various kinds of derivative rights based on specific conditions affecting the underlying asset value.
The derivatives exchange will direct the manner in which the intellectual property rights, either owned by these companies or acquired on their behalf, will be transferred to third parties in accordance with the owners’ objectives. This will relieve the company of the burden of establishing andadministering a licensing program to maximize the value of their IP and will provide investors in IP an avenue for marketing those rights instead of engaging in inefficient, costly and unfamiliar licensing negotiations.
Where all could the applications be ?
1. Under the most recent context global sporting events like the current (2007) world cup, an exchange for derivatives comprising of notional cash value of say runs scored by a batsman, a basket of such values could be securitized and be traded on an exchange, in lay man terms an Exchange which will have an instrument SachinAPRIL 30, i.e a derivatives instrument whose pay off would be linked to the runs scored by sachin as of april 30th or AUSTRALIAWC07APRIL30 this market could then attract participants like advertisers,media channels,branders,consumers investors and speculators.
2. Film and Movie Industry : an active and liquid market comprising of actors,technicians,financiers,producers,investors,distrubutors,advertisers media channels and end consumners(the guy who pays money and buys ticket/dvds)
3. Software and Products company.
4. Architectural firms,building, construction and realt companies,REITS. Eg RELIANCESEZNEAR MUMBAI 2011 futures.
5. Art and artwork.
Current methods of intellectual property exchange are inefficient and often hinder companies from easily realizing value from existing IP assets. In addition, intellectual property enforcement is costly and uncertain and entails lengthy negotiations or legal actions.
As a result, necessary IP rights are not effectively transferred, the “best price” for IP is rarely achieved, and the process itself inhibits the market adoption of new technology based products and hence their companies’ economic growth.
What is Intellectual capital ?
Intellectual capital is a term with various definitions in different theories of economics. Accordingly its only truly neutral definition is as a debate over economic "intangibles". Ambiguous combinations of instructional capital and individual capital employed in productive enterprise are usually what is meant by the term, when it is used to actually refer to a capital asset whose yield is intellectual rights.Such use is rare, however, and the term rarely or never appears in accounting proper - it refers to a debate, and to the assumed capital base that creates intellectual property, rather than an auditable style of capital.
Perhaps due to their industry focus, the term "intellectual capital" is employed mostly by theorists in information technology, innovation research, technology transfer and other fields concerned primarily with technology, standards, and venture capital.
It was particularly prevalent in 1995-2000 as theories proliferated to explain the "dotcom boom" and high valuations. During this period it was often observed that computer code and programmers were bearing a substantial premium when combined in new unproven companies.
It is hard to see how this differs from the tulip boom, however, when it would have been just as likely to assign a high value to the seemingly-magical combinations of tulip bulbs and, say, the pots they grew in.Brand as an AssetWhether flags, brands, labels or simple fear dominate economic decisions, it seems that the underlying theories of intellectual capital and of human capital don't explain them.
When attached to "capital" as prefixes, the terms "intellectual", "knowledge" and "human" often conceal more than their use can reveal. Thus the terms intellectual capital, knowledge capital and human capital more properly describe debates, not assets, as internally generated assets do not appear on a balance sheet, however International Financial Reporting Standard 3 on Business Combinations requires acquired intangible assets to be accounted for during the purchase price allocation exercise.
They produce neat abstractions but so far poorly explain what actually occurs in the biologically real world: individuals buying in a social setting based on instructions.So far, the more specific terms "individual", "instructional" and "social" from human development theory, have been preferred in Wikipedia as adjectives describing classes of capital. In part this is because these terms have definitions that arise from academic categories and practices rather than faddish marketing or management theories.
There are standards for assigning value to these, e.g. the UN Human Development Index which literally ranks flags (of countries) for quality of life.Extending such standards to labels (via mandatory labelling) and applying them positively in brand management, e.g. positioning a brand for appeal to an ethical minority, is increasingly common.
Projects by Consumerium and AdBusters seek to make comprehensive outcomes more important in buying decisions. This in turn is part of a trend towards more moral purchasing.When viewed as an asset, then, a brand is simple social capital that may have an increasing amount of instructional capital attached to satisfy an ever-rising demand for more information about product origin, production and distribution.
Why should any asset be intangeible ?
Intangible assets are defined as those non-monetary assets that cannot be seen, touched or physically measured and which are created through time and/or effort.
There are two primary forms of intangibles - legal intangibles (such as trade secrets (e.g., customer lists), copyrights, patents, trademarks, and goodwill) and competitive intangibles (such as knowledge activities (know-how,knowledge), collaboration activities, leverage activities, and structural activities.
Legal intangibles generate legal property rights defensible in a court of law. Competitive intangibles, whilst legally non-ownable, directly impact effectiveness, productivity, wastage, and opportunity costs within an organization - and therefore costs, revenues, customer service, satisfaction, market value, and share price.
Human capital is the primary source of competitive intangibles for organizations today. Competitive intangibles are the source from which competitive advantage flows, or is destroyed.
The development of new IP exchange practices ultimately may lead to the creation of an operating Intellectual Property Rights Exchange in the future, providing for the efficient open market trading of various direct(spot/cash) and derivative IP-based license, debt equity and hybrid investments.
Such an exchange could bring together IP owners, consumers and investors with a solution for current market inefficiency and provide companies with a mechanism for funding additional innovation, reducing their exposure to legal actions, and increasing their access to underutilized patents and technologies. The objective that as a result, faster commercialization of technology will accelerate long-term economic growth.
Different types of trading activities may be developed, bound by the common principles of consistent transaction termsand market pricing. Transactions might be for license rights (e.g., for a specific quantity of production), for ownership rights (e.g., via an open auction), or for various kinds of derivative rights based on specific conditions affecting the underlying asset value.
The derivatives exchange will direct the manner in which the intellectual property rights, either owned by these companies or acquired on their behalf, will be transferred to third parties in accordance with the owners’ objectives. This will relieve the company of the burden of establishing andadministering a licensing program to maximize the value of their IP and will provide investors in IP an avenue for marketing those rights instead of engaging in inefficient, costly and unfamiliar licensing negotiations.
Where all could the applications be ?
1. Under the most recent context global sporting events like the current (2007) world cup, an exchange for derivatives comprising of notional cash value of say runs scored by a batsman, a basket of such values could be securitized and be traded on an exchange, in lay man terms an Exchange which will have an instrument SachinAPRIL 30, i.e a derivatives instrument whose pay off would be linked to the runs scored by sachin as of april 30th or AUSTRALIAWC07APRIL30 this market could then attract participants like advertisers,media channels,branders,consumers investors and speculators.
2. Film and Movie Industry : an active and liquid market comprising of actors,technicians,financiers,producers,investors,distrubutors,advertisers media channels and end consumners(the guy who pays money and buys ticket/dvds)
3. Software and Products company.
4. Architectural firms,building, construction and realt companies,REITS. Eg RELIANCESEZNEAR MUMBAI 2011 futures.
5. Art and artwork.
Tuesday, July 17, 2007
Crusader of Rights to Information is no more
Transparency in Public Life15 Jul, 2007
Transparency in public life
By Prakash Kardaley
(Prakash Kardaley, a crusader for the Right to Information passed away of 15 July 2007. This article was written a three days before his demise and reflects his views on transparency)
The greatest adversary of the law on of transparency is not really the bureaucracy. Not every bureaucrat is opposed to transparency; in any case, the bureaucracy can always be tamed or disciplined. The worst opposition to the spirit of transparency is our own hypocrisy.
We want every piece of paper in government offices to be made accessible to the people and yet we fiercely resist any suggestion to open up our own income tax returns – which in fact is our declaration of our liability to the government and thereby to the people at large. There are many organizations that make ear-splitting noise to force the government to enforce every word and comma of the transparency law but are significantly silent when it comes to opening up their own transactions.
What is wrong with transparency unless one desperately wants to cover up one’s own misdeeds? Transparency in public life either in spirit or as a piece of legislation, when codified into a law knows its legitimate laxman rekha. It does not cause any unwarranted invasion of individual privacy. It does not expect disclosure of information that would be detrimental to the society at large. On the other hand, it attacks excessive secrecy, which is in fact is injurious to the well being of society. Any opposition to the spirit of transparency, therefore, must be seen as profound disrespect to society.
Many of us tend to take a myopic view of the law on transparency. We identify it as a weapon bestowed upon people to root out corruption in government. Of course, that is one of its objectives. But the purpose of creating such legislation goes much beyond. The Transparency law - rightly called `sunshine law’ in USA - is a potent instrument that ushers in good governance. It ensures that all bodies or institutions in the public domain function under the watchful eyes of stakeholders. This will curb malpractices and corruption.
Stakeholders of every public venture therefore, have an inherent right to demand transparency from those who function in public interest. Students and parents have a right to demand a reasonable level of transparency from educational institutions. Depositors, investors have a right to expect the same from financial institutions.
Justice P B Sawant, former judge of the Supreme Court, as the Chairman of the Press Council of India, presented the first draft of the RTI Act in India and is an ardent advocate bringing the private sector under the purview of the transparency law. The private sector gets its funds from shareholders and depositors money as well as from financial institutions, he says, which shows that they too use public resources to run their companies. All major scams, he points out, have been in the private sector, especially in banks and financial institutions and yet, secrecy is greater in the private sector, whereas truth comes out sooner in the public sector.
Justice Sawant says it is imperative to extend the RTI Act to the private sector lock and stock and barrel especially at a time when many public services and public sector undertakings are being privatized. He emphasizes that all institutions that carry out activities that are of public interest, must come under the purview of the RTI law.
The draft of the Right to Information Bill, 1996, as suggested by Press Council of India, therefore, defined “public authority” as:
(i) The Government and Parliament of India and the Government and Legislature of each of the States and a local or other authorities within the territory of India or under the control of the Government of India; and
(ii) A company, corporation, trust, firm, society or a cooperative society, whether owned or controlled by private individuals and institutions whose activities affect the public interest; [The expressions company, corporation, trust, firm, society and cooperative society shall have the same meaning as assigned to them in the respective Acts under which they are registered.]
The Right to Information Act, 2005, did not incorporate Justice Sawant’s radical definition of a public authority, but it came fairly close to his concept when it included bodies ``owned, controlled or substantially financed’’ by the government as well as ``non-Government organization substantially financed, directly or indirectly by funds’’ provided by the government.
These ``non-government organizations’’ do not merely mean the jholawala NGOs but all ``authorities, bodies or institution of self government established or constituted by or under the Constitution; by any other law made by Parliament; by any other law made by State Legislature or by notification issued or order made by the appropriate government’’, thus bringing under the purview of the RTI Act, therefore, companies, corporations, trusts, firms, societies or cooperative societies, as envisaged by Justice Sawant, irrespective of the nature of their ownership, except for the condition that these be either ``controlled or substantially financed’’ by the government.
Going by the letter and spirit of the Act, information commissions have begun giving their rulings on the interpretation of ``controlled’’ with respect to various types of these private bodies. The Gujarat Information Commission on May 15 decided that all co-operative societies, including cooperative banks, are bodies ``controlled’’ by the government and therefore are required to abide by the provisions of the RTI Act.
The Central Information Commission (CIC) on June 7 declared in unambiguous terms that functioning all recognized stock exchanges are under the ``deep and all pervasive close control’’ Central Government and hence are public authorities, being obliged to give information to any requisitioner under the Act.
In support of its observations that stock exchanges, undoubtedly are controlled by the government, the CIC cited, apart from pronouncements of the apex court, a whole array of provisions in the SEBI Act including its preamble which declares that it is "An Act to provide for the establishment of a Board to protect the interest of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto".
Any right thinking person would have expected stock exchanges not to have opposed a requisition under the RTI Act in the first place or at least have decided to honour the decision of the Central Information Commission. After all, what is there to hide? What is there in any disclosure of information that would go against the public interest?
Yet, the National Stock Exchange (NSE) in its wisdom has approached the higher judiciary challenging the interpretation pronounced by the CIC. All one can do at the moment is to wait and watch, but at the same time wonder how the NSE that claims to be totally autonomous is being represented in the court by an additional solicitor general!
This article was ctrlc ctrlveed from suchetas website www.suchetadalal.com, and is copyrighted to her site, my sincere apologies are to sucheta who had to remind me of copy right violation my apologies mam i respect you and wanted people in my yahoogroups to know about RTI crusader
Transparency in public life
By Prakash Kardaley
(Prakash Kardaley, a crusader for the Right to Information passed away of 15 July 2007. This article was written a three days before his demise and reflects his views on transparency)
The greatest adversary of the law on of transparency is not really the bureaucracy. Not every bureaucrat is opposed to transparency; in any case, the bureaucracy can always be tamed or disciplined. The worst opposition to the spirit of transparency is our own hypocrisy.
We want every piece of paper in government offices to be made accessible to the people and yet we fiercely resist any suggestion to open up our own income tax returns – which in fact is our declaration of our liability to the government and thereby to the people at large. There are many organizations that make ear-splitting noise to force the government to enforce every word and comma of the transparency law but are significantly silent when it comes to opening up their own transactions.
What is wrong with transparency unless one desperately wants to cover up one’s own misdeeds? Transparency in public life either in spirit or as a piece of legislation, when codified into a law knows its legitimate laxman rekha. It does not cause any unwarranted invasion of individual privacy. It does not expect disclosure of information that would be detrimental to the society at large. On the other hand, it attacks excessive secrecy, which is in fact is injurious to the well being of society. Any opposition to the spirit of transparency, therefore, must be seen as profound disrespect to society.
Many of us tend to take a myopic view of the law on transparency. We identify it as a weapon bestowed upon people to root out corruption in government. Of course, that is one of its objectives. But the purpose of creating such legislation goes much beyond. The Transparency law - rightly called `sunshine law’ in USA - is a potent instrument that ushers in good governance. It ensures that all bodies or institutions in the public domain function under the watchful eyes of stakeholders. This will curb malpractices and corruption.
Stakeholders of every public venture therefore, have an inherent right to demand transparency from those who function in public interest. Students and parents have a right to demand a reasonable level of transparency from educational institutions. Depositors, investors have a right to expect the same from financial institutions.
Justice P B Sawant, former judge of the Supreme Court, as the Chairman of the Press Council of India, presented the first draft of the RTI Act in India and is an ardent advocate bringing the private sector under the purview of the transparency law. The private sector gets its funds from shareholders and depositors money as well as from financial institutions, he says, which shows that they too use public resources to run their companies. All major scams, he points out, have been in the private sector, especially in banks and financial institutions and yet, secrecy is greater in the private sector, whereas truth comes out sooner in the public sector.
Justice Sawant says it is imperative to extend the RTI Act to the private sector lock and stock and barrel especially at a time when many public services and public sector undertakings are being privatized. He emphasizes that all institutions that carry out activities that are of public interest, must come under the purview of the RTI law.
The draft of the Right to Information Bill, 1996, as suggested by Press Council of India, therefore, defined “public authority” as:
(i) The Government and Parliament of India and the Government and Legislature of each of the States and a local or other authorities within the territory of India or under the control of the Government of India; and
(ii) A company, corporation, trust, firm, society or a cooperative society, whether owned or controlled by private individuals and institutions whose activities affect the public interest; [The expressions company, corporation, trust, firm, society and cooperative society shall have the same meaning as assigned to them in the respective Acts under which they are registered.]
The Right to Information Act, 2005, did not incorporate Justice Sawant’s radical definition of a public authority, but it came fairly close to his concept when it included bodies ``owned, controlled or substantially financed’’ by the government as well as ``non-Government organization substantially financed, directly or indirectly by funds’’ provided by the government.
These ``non-government organizations’’ do not merely mean the jholawala NGOs but all ``authorities, bodies or institution of self government established or constituted by or under the Constitution; by any other law made by Parliament; by any other law made by State Legislature or by notification issued or order made by the appropriate government’’, thus bringing under the purview of the RTI Act, therefore, companies, corporations, trusts, firms, societies or cooperative societies, as envisaged by Justice Sawant, irrespective of the nature of their ownership, except for the condition that these be either ``controlled or substantially financed’’ by the government.
Going by the letter and spirit of the Act, information commissions have begun giving their rulings on the interpretation of ``controlled’’ with respect to various types of these private bodies. The Gujarat Information Commission on May 15 decided that all co-operative societies, including cooperative banks, are bodies ``controlled’’ by the government and therefore are required to abide by the provisions of the RTI Act.
The Central Information Commission (CIC) on June 7 declared in unambiguous terms that functioning all recognized stock exchanges are under the ``deep and all pervasive close control’’ Central Government and hence are public authorities, being obliged to give information to any requisitioner under the Act.
In support of its observations that stock exchanges, undoubtedly are controlled by the government, the CIC cited, apart from pronouncements of the apex court, a whole array of provisions in the SEBI Act including its preamble which declares that it is "An Act to provide for the establishment of a Board to protect the interest of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto".
Any right thinking person would have expected stock exchanges not to have opposed a requisition under the RTI Act in the first place or at least have decided to honour the decision of the Central Information Commission. After all, what is there to hide? What is there in any disclosure of information that would go against the public interest?
Yet, the National Stock Exchange (NSE) in its wisdom has approached the higher judiciary challenging the interpretation pronounced by the CIC. All one can do at the moment is to wait and watch, but at the same time wonder how the NSE that claims to be totally autonomous is being represented in the court by an additional solicitor general!
This article was ctrlc ctrlveed from suchetas website www.suchetadalal.com, and is copyrighted to her site, my sincere apologies are to sucheta who had to remind me of copy right violation my apologies mam i respect you and wanted people in my yahoogroups to know about RTI crusader
Buy Uranium ?
1. SupplyBetween the late 1980s and early this decade secondary supplies hung over the market, resulting in very low prices and inducing little to no investment in uranium exploration and output capacity. Since the late 1980s primary mine supply has not been sufficient to meet demand and so large quantities of non-recyclable secondary supplies were 'used up' in filling this gap over this period.
2. DemandThe drying up of secondary supply sources and tight uranium market has driven the massive increase in demand for future primary mine supply over the past three years, evidenced by a massive increase in long-term contracting in recent years. Current supply shortage is being exacerbated by speculators/hedge funds entering the market and holding large quantities of uranium (roughly 8-10,000tU is estimated be held of the market).Unlike other metals, the initial boom in the uranium price was not directly tied to China (actual demand from China to date is reportedly negligible), it is more of a traditional underinvestment / tight market related cyclical price boom.
3. Speculative activityHas been playing a big role in the boom in spot prices. On and off-market uranium futures began trading on NYME on 7 May (no physical delivery) - the June 2007 contract is trading at $134.9/lb and the February 2008 contract last traded at $150.0/lb.
Reasons to Buy into the Uranium Story…
2. DemandThe drying up of secondary supply sources and tight uranium market has driven the massive increase in demand for future primary mine supply over the past three years, evidenced by a massive increase in long-term contracting in recent years. Current supply shortage is being exacerbated by speculators/hedge funds entering the market and holding large quantities of uranium (roughly 8-10,000tU is estimated be held of the market).Unlike other metals, the initial boom in the uranium price was not directly tied to China (actual demand from China to date is reportedly negligible), it is more of a traditional underinvestment / tight market related cyclical price boom.
3. Speculative activityHas been playing a big role in the boom in spot prices. On and off-market uranium futures began trading on NYME on 7 May (no physical delivery) - the June 2007 contract is trading at $134.9/lb and the February 2008 contract last traded at $150.0/lb.
Reasons to Buy into the Uranium Story…
- Concerns over future supply fuelled by the delays at Cameco's massive 18mlbpa capacity Cigar Lake project, will keep reactor demand for future mine supply at very high levels in the coming year.
- Recent flooding at ERA's Ranger mine - the world's second highest producing mine – will reduce supply from the mine significantly in 2008, taking much-needed supply off a market already in deficit.
- High levels of reactor procurement of future mine supply is likely to continue to spill over to the spot market
- The Real need for clean fuels ,corelation with carbon credits Global warming.
- Uranium held by speculators/hedge funds appears to be in tight hands (at current prices).
- Producer, consumer and (strategic) government inventory building (China in particular), is likely to keep the market tight in the coming years.
- Uranium futures (no physical delivery) are giving bullish guidance as to uranium prices going forward – with the June 2007 contract trading around $135/lb and the early 2008 contracts at $150.0/lb.
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