Cantor Futures Exchange (CX Futures Exchange): Overview

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Lucas Downey
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Updated March 04, 2024
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Cantor Futures Exchange (CX Futures Exchange): A U.S.-regulated exchange that trades foreign exchange products, metals, tropical storms, and other types of weather.

Investopedia / Mira Norian

What Is the Cantor Futures Exchange (CX Futures Exchange)?

The Cantor Futures Exchange, now called CX Futures Exchange, is a U.S. regulated exchange, regulated by the U.S. Commodity Futures Trading Commission (CFTC) that offers three brands, which are Cantor Exchange, CX, and CX Markets. Through these brands, CX Futures offers the trading of derivative instruments. Products include foreign exchange (Forex), tropical storms, other types of weather, and metals.

Key Takeaways

  • The Cantor Futures Exchange, now the CX Futures Exchange, offers real-money trading in foreign exchange products, tropical storms, metals, and other types of weather.
  • Traders choose a specific market, such as rain or snow, make a prediction for the weather on a particular day, and receive a payout if they are correct.
  • The Cantor Futures Exchange got its name from its parent company, Cantor Fitzgerald.
  • Upon launching in 2010, the Cantor Futures Exchange was similar to the Hollywood Stock Exchange (HSX), which it purchased, which is a game that allows people to buy shares, based on movies and celebrities, using and accumulating fake capital.
  • The Cantor Exchange at the time was an electronic and online marketplace where investors could buy and sell domestic (U.S.) box office receipt contracts, also known as DBOR contracts or movie futures.
  • DBOR futures were banned due to the Dodd-Frank Act so the Cantor Futures Exchange revamped and became the CX Futures Exchange, offering financial products not readily available on other U.S. exchanges. 

Understanding the Cantor Futures Exchange (CX Futures Exchange)

The primary focus of the CX Futures Exchange is CX Markets, where trading on weather is offered. Speculators and hedgers can make trades based on where tropical storms will make landfall, snowfall amounts, rainfall amounts, and temperatures. 

The process works by first selecting a market to bet on. The markets include rain, snow, hurricane landfalls, and high and low temperatures. Once a market is chosen by a trader, they have to make a prediction for the weather on a specific day. The last step is the payout and the traders are paid out proportionally to their accuracy and the total amount of money they invested.

Payouts for weather-related products depend on how many contracts are purchased by traders. As the contracts purchased increase, the payout to the winner (who predicts the correct weather or storm landfall location) increases. Traders pay a fee for each contract purchased.

CX Markets also offers trading on forex and gold binary options. Binary options offer a fixed payout for trades finishing in the money, while also keeping losses contained to the amount wagered on losing trades.

The CX Markets exchange allows those who want to speculate on weather-related events with ease. Over time, it is safe to assume that other types of wagers will be available on all sorts of events. If there is something to bet on, and Wall Street sees the demand, there will likely be an exchange created.

History of the Cantor Futures Exchange (CX Futures Exchange)

The Cantor Futures Exchange has changed its position and the products it offers over the years. Originally, the Cantor Exchange was an electronic and online marketplace where investors could buy and sell domestic (U.S.) box office receipt contracts, also known as DBOR contracts or movie futures.

The exchange, approved by the U.S. Commodity Futures Trading Commission in June 2010, allowed investors to bet on how financially successful upcoming movie releases would be in theaters.

In this respect, it was similar to the Hollywood Stock Exchange (HSX), which allows people to buy shares, based on movies and celebrities, using and accumulating fake capital. DBOR contracts were also slated to trade on the Trend Exchange, which no longer exists.

The Motion Picture Association of America, the Directors Guild of America, and other major industry groups opposed the DBOR exchange, saying it created a risk of market manipulation and conflicts of interest. Supporters said it could help companies in the movie industry manage movie-production risk by hedging.

Ultimately, DBOR futures were banned due to the Dodd-Frank Act which was signed one month after the movie futures were made legal. Due to the quick legal turnaround, movie futures were never actually traded on the exchange. The Cantor Futures exchange revamped and became the CX Futures Exchange, offering financial products not readily available on other U.S. exchanges.

The Cantor Futures Exchange got its name from its parent company, Cantor Fitzgerald.

Where Can I Trade Weather Derivatives?

Weather futures and options can be traded on the Chicago Mercantile Exchange (CME). The products are from 18 U.S. and European cities, including New York, Chicago, London, and Amsterdam. Heating degree days (HDD) and cooling degree days (CDD) are also available to trade.

What Are Water Futures?

The CME Group launched water futures in December 2020 in California, known as the Nasdaq Veles California Water Index. The goal was to create a derivative to hedge exposure to the price of water.

What Is the Purpose of Weather Derivatives?

Companies and individuals trade weather derivatives with the goal of hedging against the risk of weather-related losses. The entire world, and, therefore, every industry is impacted by the weather. Hurricanes, snowfall, and floods are all detrimental to the success of a business. Purchasing weather derivatives help temper any losses that businesses incur due to adverse weather events.

Article Sources
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  1. CX Markets. "Help Overview."

  2. Commodity Futures Trading Commission. "CFTC Approves Domestic Box Office Receipts Futures Contract Submitted by Cantor Futures Exchange."

  3. Anderson, Paul G. "Back to the Future[s]: A Critical Look at the Film Futures Ban." Cardozo Arts and Entertainment, vol. 29, no. 179, 2011, pp. 179-214.

  4. CME Group. "Weather Products."

  5. CME Group. "Nasdaq Veles California Water Index Futures ‒ Frequently Asked Questions."

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