Interesting article from Politico. Congress is considering banning derivatives on movie box office proceeds.
"For example, if a movie is expected to make $40 million in its first weekend and investors are worried that it will bring in only $20 million, they could take out a $1 million contract to lay off that risk. So if the movie tanks and misses its $40 million mark, they are paid $20 million. But if it makes its numbers, the investors pay $1 million to the traders who bought the contract. It’s akin to a market-based insurance policy."
Opponents say that "creating a market in movie futures and swaps would serve mostly speculative purposes and would have limited, if any, real beneficial impact to our economy."
