"The weather derivatives market is growing rapidly as energy companies, financial firms and others use these instruments to drive trading volumes and hedge risk against weather exposure, however there is a shortage of knowledge pertaining to weather derivatives trading and how to get started," said Jacob Pechenik, President/CEO of YellowJacket.
"The Starter Kit addresses the specific need for hedge funds, investment banks and others to get started by offering the trading tools and data required to begin trading these instruments."
New clients will receive customized versions of the Starter Kit depending on their needs. Services offered include:
- YellowJacket - a network and platform which optimizes off-exchange energy derivatives trading. More than 80% of the weather derivatives market is quoted over its trade platform, YJ ENERGY.
- Climetrix(r) - weather-related risk management tools, a comprehensive range of data and state-of-the-art modeling capabilities.
- MDA EarthSat - real-time access to MDA EarthSat's weather model updates and temperature variance updates via YellowJacket's YJ ENERGY.
"We are seeing a surge of new entrants into the weather market, but we know for a fact it could be much higher," said Jordan Byk, Weather Risk Manager, of RMS. "We are excited that together our firms can offer the market a one-stop means to obtain a straightforward entry point into the market, which will inevitably increase the amount of participants and liquidity," he continued.
Matt Rogers, Deputy Director of MDA EarthSat Weather, agreed. "Since trading weather contracts and hedging risk are based on even small changes in forecasts, clients now have a one-stop method to obtain all three firms' offerings that are not only best-in-class individually but specifically synergistic to weather trading operations."