Just trading shares, bonds, or orange juice futures? Then you could be missing out. There is a world of other less well-known assets and trading opportunities out there that it might be worth your while exploring. Here are some of the most unusual examples to be found in the markets.
Sadly no-one can buy good weather. But what you can do is trade in relation to the likelihood of certain types of weather occurring – for example, an amount of rainfall, or when the first winter frosts will come.
First devised in the late 90s, weather derivatives are often used by agricultural businesses, events companies, or other parties significantly affected by the weather. But they are available to other traders too.
One of the most popular varieties of weather derivatives involve “heating degree days”. These track how many days over a set period temperatures in a certain location rise or fall above a set level, and pay out on this basis.
One of the key advantages of trading in relation to weather is that ups and downs here are mostly not correlated to other market movements. This means trading in relation to weather can be a great way to hedge a portfolio.
Bit of a film buff? There is a way to trade on your knowledge and get a qualitative reward from it, alongside that sense of satisfaction to be had from the success of a film you had tipped do well – or the flop of one you thought would certainly be a stinker.
Enter the Hollywood Stock Exchange. This service, currently only available in the US, gives punters the chance to back films – or to short them. You can also invest in the career highs and lows of individual actors or directors.
Unfortunately, any trading you do on the Hollywood Stock Exchange will only yield you make-believe dollars. Broker Cantor Fitzgerald attempted to turn what is at the moment essentially a game into a real trading system. But Hollywood protested so much that these plans were shelved.
So, for the time being, see trading here as a way to practice your skills rather than to get the millions needed for that film star mansion.
Italian Cheese and Ham
Aged Parmesan cheese and Parma ham may sound to many like the start of a delicious meal. But did you know they could also be the makings of an interesting investment strategy?
French investment house Amundi certainly thinks so. The asset manager has set up a business lending to Italian makers of these delicious products, who have struggled to find financing due to issues in the Italian economy.
The funds enable them to store their cheeses and hams under optimal conditions for the crucial multi-year maturing process. Meanwhile, Amundi’s money is backed by rights over the finished products, for which there is always certain to be a market.
Sadly, however, this type of investment could be a hard one for the average trader to get a slice of. But knowing it is out there is at least a great excuse to sample the assets involved, just in case.
We all know banknotes are good things to have, financially speaking. Generally, the more of them you gather, the better you’re doing as a trader. But as well as being a sign of success in trading, they can also be a valuable asset in their own right.
There has long been trading in antique and rare banknotes. It is very possible to make money from these if you have the expertise required, and knowledge of the workings of this market.
However if you do not, you could try acquiring notes that are forecast to go out of circulation. For example, some predict that very high denomination notes will slowly disappear, so these could eventually be worth far more than their face value.
But use your trading smarts when picking a currency. Some banknotes in Venezuela, for instance, have become so worthless that it has become more profitable to turn them into bags and purses than to use them for anything financial.