July 25, 2005 | Buffalo NewsA trio of professors at the University of Miami is launching an electronic futures market on hurricanes. Traders who buy or sell the right spot at the right time can cash in, maybe clearing enough profit to buy a small generator. Aptly called MAHEM, the Miami Hurricane Event Market isn't open for trading yet. Organizers are still refining the prospectus and plugging holes in their Web site, mahem.miami.edu, but MAHEM is slated to debut any day now -- in the name of research and education. Investors can open accounts by sending any amount from $5 to $500 to the Iowa Electronic Markets, or IEM, which is operated by the University of Iowa, a MAHEM partner. All IEM transactions are made electronically and posted in real time. As soon as a tropical storm earns a name, the market will open, and online trading will begin. Depending where the storm is at the time, it will be declared an Atlantic or a Gulf storm, and only contracts, or shares, for that U.S. coastline will be sold. "With a maximum investment of $500, nobody will get rich," said FORREST NELSON, an economist at the University of Iowa and one of the founding directors of the IEM. "But it might give someone some bragging rights." The paper is based in New York.
Contact: Forrest Nelson