CME Group Hurricane Products

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With three types of contracts for Hurricane futures and options – covering specific regional locations and actual named hurricanes, CME Group addresses the need for managing hurricane-related risk and recognizes the limited capacity in the insurance industry to insure customer claims. The index provider for all hurricane products is Carvill Hurricane Index (CHI).

The products provide a way to:

  • Help insurers and others transfer risk to the capital markets
  • Mitigate exposures for actual named hurricanes and specific regional locations
  • Increase insurance capacity in order to insure customers or hedge businesses

Customers can choose among 4 contract types:

Hurricane Event contracts cover specific regional locations and actual named hurricanes making landfall in the United States Atlantic basin.

Hurricane Seasonal contracts focus on the total number of hurricanes that occur within a specific location or geographic area between June 1 and November 30.

Hurricane Seasonal Maximum contracts Focus on the largest hurricane to make landfall within a specific location or geographic region between June 1 and November 30.

Cat-In-A-Box refers to a geographical area that spans the coast from Galveston, Texas to Mobile, Alabama.

  • Contracts are cash-settled and trade electronically on the CME Globex platform
  • Block trading available
  • CME Clearing clears and settles all trades and guarantees counterparty creditworthiness within 2 business days following expiration [1]

References

  1. CME Group Hurricane products. CME Group.