The HedgeStreet Exchange, which began offering option contracts based on hurricane damage levels in 2006, said the firm believes contract trading will pick up this year.
HedgeStreet market strategist Peter Rosenstreich said in an interview that trading was relatively light last year but the firm hopes it will pick up once word of the new weather derivative concept spreads.
Option contracts, which can be purchased cheaply, serve as a form of property insurance supplement for homeowners who fear an oncoming storm may deplete their bank accounts.
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