Chicago Mercantile Exchange will launch trading Sept. 22 in the first...

Chicago Mercantile Exchange will launch trading Sept. 22 in the first exchange-traded, temperature-related weather derivatives. The CME will offer heating degree day index futures for four U.S. cities: New York, Chicago, Cincinnati and Atlanta. The contracts are designed to provide a risk-management tool to help businesses protect their revenue during times of depressed demand or from excessive costs resulting from unexpected or unfavorable weather conditions. Four firms that are very active in the OTC weather markets have agreed to serve as market makers for the new contracts: Aquila Energy, Castlebridge Weather Markets, Koch Energy Trading and Southern Energy. CME HDD futures will be sized at $100 times the CME HDD index. The exchange will initially list monthly contract expirations from October through March.