"We have sat through literally hundreds of meetings in the last year with portfolio managers exposed to shipping equities who spend their time tracking the BDI as a measure of where the market is heading", says Herman Michelet IMAREX ceo.
He claims that by trading the BDIFutures contract, stock portfolio managers can protect the value of the shipping equities portfolio from upside and downside price risk of the broader dry bulk market as most heavily traded dry bulk shipping shares correlate to a high degree with the movement of the underlying freight market
"The BDI itself is a retrospective index published once per day and it reflects market movements in the last 24 hours. It is not a gauge of what might happen next - basically, you cannot trade the BDI itself. So we have launched the BDI Index Future contract which will do to the BDI what S&P500 Futures do to the S&P500 Index ?"and that is to make it tradable," says Michelet.
The IMAREX BDIFutures contract is being launched to fill a void left by the BIFFEX, a London-based freight futures contracts with settlement based on the Baltic Freight Index which was closed down in 2001, before the shipping boom of recent years started.
BDIFutures are cleared at NOS Clearing, and will be available on the IMAREX trading screen and via participating prime brokers and General Clearing Members. [
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