You May Soon Be Able to Invest in Movie Box Office Futures

(HMG) – You know they say it’s a good idea to invest in the things you like or know a lot about.  Well if you happen to know the film industry well enough to pick the likely good new movies from the stinkers, you might be interested in this. The Commodities Futures Trading Commission (CFTC) on Friday cleared the way so that box-office futures could become a traded commodity in the near future. Media Derivatives received the green light to launch its Trend Exchange, known as TrendEx, which would allow participants to bet on hit movies, though it still needs to get permission to trade specifically in futures tied to box-office receipts.  The CFTC will take up approval for boxoffice trading before a June 7 deadline, according to The Hollywood Reporter.

TrendEx, like its rival Cantor Exchange, says that this secondary market in the movie business could become an essential instrument for hedging investments, but Hollywood has yet to buy into it. In a letter to the CFTC, a coalition of five major movie-industry trade associations—representing everyone from directors to theater owners—registered their opposition and asked the commission to put its decision on hold.  “If they don’t let a product like this become available, it’s not hurting the big studios, it’s hurting all the independents,” TrendEx CEO Robert Swagger said. In any case financial-reform legislation currently being discussed in the Senate may contain provisions that would ban box-office derivatives.