IMAREX (the International Maritime Exchange), the Oslo-based exchange for trading of maritime-related derivative contracts, will today launch an electronically traded and cleared futures contract on the Baltic Dry Index (BDI).
This will allow traders to buy and sell the entire dry bulk sector in one simple contract. The IMAREX BDI Index Futures contract (BDI Futures) is a composite of global shipping costs for bulk commodities such as grains, ore and coal and a widely accepted measure of the state of global trade. It is aimed squarely at the cash equity and equity derivatives trading community as well as portfolio managers and commodity traders looking to increase their exposure to movements in the dry bulk shipping markets. "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. 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.
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