Cantor’s Movie Exchange and the Future of Trading
In the works for years, Cantor Fitzgerald said yesterday that the firm is expecting to launch an electronic futures exchange in movie box office receipts next month.
It's called Cantor Exchange and it's built on top of the Hollywood Stock Exchange (HSX), purchased by Cantor after the dot-com fallout. The HSX allows virtual investors to buy and sell futures contracts based on the success of movies and actors.
Cantor Exchange will allow investors to do the same using real money. The movie industry can also find liquidity and leverage in the platform to either hedge their bets with new releases or double-down on movies slated to be successes.
The launch is dependent upon approval by the U.S. Commodity Futures Trading Commission.
What it all means: investing, markets, hedging
Online forex is on fire. Just check out the recent filing for an IPO by one of the largest players. Peer to peer lending has proven tricky, yet popular. Case Shiller housing indices have spawned options, futures, and even exchange traded products to capture changes in housing prices.
Given the popularity and predictability of the HSX, there is no reason to think that box office receipts won't also enjoy success. What's interesting here is how the Internet is empowering the creation of new markets -- allowing speculators the chance to profit and other participants the opportunity to hedge.