Washington, DC -- The U.S. Commodity Futures Trading Commission (CFTC) today approved the application of Media Derivatives, Inc. (MDEX) for designation as a contract market. The Commodity Exchange Act requires the Commission to approve such applications if the applicant meets criteria enumerated in the Act.

MDEX also has requested approval from the CFTC of a contract related to motion picture box office receipts. The Commission is still considering that issue. Moreover, given the novel nature of the contracts that MDEX has proposed trading, the CFTC has requested, and MDEX has agreed, that rather than self-certifying such contracts, MDEX must submit all new classes or categories of media-related contracts it lists for approval by the Commission. The Commission has not approved the trading of any futures or options related to box office receipts at this time.

• • 4/20/2010 4:47:46 PM
  • moviegeek23
  • This is a good thing
  • There are dozens, if not hundreds, of web sites right now that offer box office prediction contests and/or promote analytical models and strategies for calculating box office performance. Box Office receipts can already be "wagered" on through many offshore sportsbooks and non-US exchanges such as Intrade. Intrade right now has multiple binary strike contracts on 4 upcoming movies. If the "cast and crew" of these movies aren't already making a killing in these markets, perhaps pre-release information on these productions isn't so secretive after all? The internet is like "word of mouth" on steroids. Once the movie release is announced, the public will quickly pass judgement on box office expectations. This happens right now in unregulated, purely speculative cyberspace. In fact, the rumor mill started cranking yesterday about the disaster that the Green Hornet movie is becoming, and that isn't scheduled for release until December. The Trend Exchange is targeting institutional traders only, and these contracts would not be available to your average Joe on the street unless they traded them through an intermediated broker who had a clearing relationship with an approved FCM. However, the Cantor Exchange would allow you to trade these movie futures through your credit card – not a very safe proposition, IMO. These are two separate business models being proposed. And the CFTC staff TWICE recommended Trend Exchange approval to their commissioners, but the "political animals" that head the CFTC were frightened by the media blitz created by the entertainment industry against it. And know this - their objections are directly related to the attempts at transparency into box office receipt calculation that these markets would offer. So much is tied to box office numbers (merchandising, future distribution, compensation, royalties, other contracts) that the studios like to "massage" these numbers to help their bottom line. These attempts to hold these CORPORATIONS to the same accurate accounting standards that every other business needs to adhere to should be applauded, not condemned! Also, these products being proposed will be exchange-based, federally-regulated, centrally-cleared instruments. The mortgage-backed derivatives that caused the recent financial meltdown were over-the-counter (OTC), off-exchange, UNREGULATED instruments. The Trend Exchange will bring this existing, unregulated speculation into a regulated exchange-based marketplace. These new markets will provide them an option to offset their existing financial risk. Futures trading is about managing risk through price discovery and risk transfer. It is about bringing standards, transparency and integrity to the management of economic risks that already exist.

• Top 10 largest gold reserves by country
• Traders wait as S&P hovers below short-term high
• Argentinean corn crop gets hammered
• Gold falls after better than expected jobs report
• Stock indexes struggles between support, resistance
• U.S. dollar quiet -- the calm before the storm?
• Oil treating Iranian threats as “Boy who cried wolf”