India to roll out RainMumbai, world's 1st exchange-traded rainfall index
India is about to roll out the world's first exchange-traded rainfall index, called RainMumbai, starting May 29.
Created by NCDEX, this move aims to help industries like power, logistics, and agri-processing deal with unpredictable monsoon rains.
Trading opens June 1 and runs through September, right in the heart of monsoon season.
RainMumbai settles to IMD spot value
RainMumbai tracks average monthly rainfall using data from the India Meteorological Department, or IMD, from 1991 to 2020.
If you think Mumbai will get more or less rain than usual, you can take a position accordingly, kind of like betting on the weather.
Contracts settle based on the IMD-determined spot value on the morning of the last calendar day of the expiry month.
To keep things running smoothly, NCDEX will have brokers provide regular buy-and-sell quotes so there's always someone to trade with.