Tropical Storm Ernesto is going to be a player

This should be a good storm to trade. It is in the Carribean now and is forecast to move into the Gulf as a hurricane. US landfall is likely. I have requested contracts to be put up. Happy trading.

I concur.

Good luck,
Sacha

If you want to get in early, you can go with the Cat 3 or higher contracts. I can see those running up as the storm gets into the warmer waters.

Ironic this is all going to take place almost 1 year to the day that Katrina hit New Orleans.

I still have not received any reply from TS regarding the issuance of these contracts. I'm hoping that they are still going to issue contracts for this.

With this thing a virtual lock to hit Florida, I suggest contracts based on intensity...

No Impact
Cat 1
Cat 2
Cat 3
Cat 4
Cat 5

Lots of volatility which is good for volume...a couple of us in the chatroom think this is the way to go for this one...any thoughts?

I'm not saying there is liquidity, and I agree that shorting FL at 20ish was good value. What I am saying is that complaining about liquidity doesn't help the market. If you want to short a lot of something, put a big offer out there. If you want to buy something, put a big bid out there. It's much more effective than waiting for someone else to act first and complaining in the meantime.

I don't think there are many traders, Sacha. We just don't have the huge headlines like we did last year. The words "major hurricane" can have a huge impact on trading. Also, last year's high activity got a lot of people on board. This has just been a bad year for the tropics but if we get a major in the Gulf that grabs coast-to-coast headlines, or a major forecast to hit the east coast, I would expect a lot of players because "everyone" has an opinion on those storms.

BTW, Tom...I shorted Florida this afternoon...I just did the math and it seemed like the one of the only plays. I really was not all that impressed by the "values" on the board...other than that bandit that made off shorting someone for 75 on Louisiana. Like Sacha, wish I could have been there...I would have emptied my bankroll on that.

If you want to short a lot more, post a large offer at a reasonable price and it will probably get taken. Right now, I'd say a reasonable price on FL is about 8-10.

Are we the only three people trading hurricanes on the site?

It sure feels that way. I have a pitifully small position short on Florida and I just wish there was more volume so that way I could make a much more material impact on my portfolio here.

Still looks like almost no chance of hitting the mainland in any other state but FL without hitting FL first. In my opinion, TS should have made it a cat 1 and included the east coast states if they were going to use the combined state/strength contracts that they usually do. That would have made for much more interesting trading.

quote:
Originally posted by Sacha:
Not a lock to hit Florida, that's for sure.

The hurricane market's liquidity has been horrible. I'm pissed off that I wasn't in front of the computer when those Louisana CAT3 contracts rang off at 75%.. I would have been willing to sell that guy 300 contracts at that price!

Well, I thought when I posted that this thing was a lock to hit Florida, but o how the tide turns. This thing may completely whiff FL but it could still be a player for the Carolinas...and yes, how about those Louisiana contracts. Really unbelievable stuff.

Liquidity has been poor and, let's face it, this season hasn't generated a lot of excitement. This system just isn't garnering the headlines that last year's systems did. Even the early systems last year had a lot more liquidity.

Not a lock to hit Florida, that's for sure.

The hurricane market's liquidity has been horrible. I'm pissed off that I wasn't in front of the computer when those Louisana CAT3 contracts rang off at 75%.. I would have been willing to sell that guy 300 contracts at that price!

quote:
Originally posted by Tom:
Still looks like almost no chance of hitting the mainland in any other state but FL without hitting FL first. In my opinion, TS should have made it a cat 1 and included the east coast states if they were going to use the combined state/strength contracts that they usually do. That would have made for much more interesting trading.

Unfortunately, TS is of the opinion that more contracts means less liquidity. The proof in the pudding may have been the many spreads for NFL football. Did that experiment, which I hope they repeat, increase or decrease overall liquidity? Even there TS didn't want to offer contracts with really extreme spreads like 21 points. Also, it would be nice if they offered the whole NFL in advance organized by week with many point spreads to choose from--let the market decide which live or wither.

Anyway, I thought the choice of hurricane contracts was very meager and it caused me to lose the enthusiasm (sp?) that I started with.

BTW, excellent suggestion as far as creating liquidity--if you want to trade place your bid or offer. Usually, I'm too lazy to do that and don't like to have bids or offers just laying there . . . but, on more than a few occasions I've traded because someone else got the ball rolling.