The US Commodity Futures Trading Commission yesterday (June 14) approved the application of fledging bourse Media Derivatives to offer the first ever listed futures and options on film box office revenues. However, two of the five CFTC commissioners, Bart Chilton and Jill Sommers, disagreed with the decision and issued dissenting opinions.
The collared futures contract and binary option contract that have been approved are based on the opening weekend revenue for the forthcoming film Takers, due to be released on 20 August.
The creation of film futures exchanges has been highly controversial, with strong opposition from the Motion Picture Association of America and equally vehement support from the two companies that have set up exchanges: Media Derivatives (MDEX) and Cantor Exchange.
While the exchanges claim the instruments would be a useful hedging product for participants in the multi-billion dollar US movie industry, opponents believe they are an unprecedented kind of...