A Strategy to Revolutionize the Hedging of Risk
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| Chicago Commodities Trading, 1900 |
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| Hedging |
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HISTORICAL WAYS OF LAYING OFF RISK
Risk can laid off many ways: 1. Insurance Contracts 2. Self-Insurance 3. Reinsurance 4. Hedging Contracts
Note: Most commodities are hedged through the futures market. |
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| Chicago WaterTower |
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| CHICAGO'S CENTRAL ROLE IN COMMODITIES
The location of railroads and processing plants made Chicago the central location for agricultural commodities during the 19th century. Beginning with eggs and butter, the exchanges moved into cattle, hog, corn, wheat over time. In the past thirty years, the CBOT and Chicago Merc have moved into currency and derivatives trading as the market became even more sophisticated.
The advent of electronic communications no longer necessitates the location of exchanges in London, New York or Chicago and exchanges are being started all over the World. |
INTERNET RISK HEDGING
In the 1990's two major events occurred.
1) Futures contracts for insurance were engineered by CBOT.
( Preliminarily reviewed by the CFTC, never launched)
2) Internet capabilities replaced traditional computing and communications.
The future of hedging risk in areas of social insurance are soon to be irreversibly transformed and will compete side-by-side with traditional insurance contracts. |
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| Internet-based Trading |
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Denver-based Health Futures Exchange (DHFEx)
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DENVER FUTURES EXCHANGE
Already a high-tech mecca for cable, digital communications and research, the Rocky Mountains is the location of choice for individuals who seek a quality of life and a desire to innovate. Our vision is a two-pronged strategy: 1) Pioneer the hedging of risk using futures contracts. and 2) Use Colorado's Foreign Capital Deposit Laws as a vehicle to attract capital for reserves. |
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