While Members of Congress Voice Opposition to Trading of Movie Box-Office Futures following the CFTC approval of initial proposals from both Media Derivatives, part of Scottsdale, Arizona-based Veriana Ventures, and Cantor Fitzgerald's Cantor Exchange unit, Katie Couric has opined.
From Katie at CBS News:
Movies are like kernels of corn, some of them pop big but a lot of them end up duds at the bottom of the bag.
But Wall Street trading firm Cantor Fitzgerald is one of two companies planning to open futures markets for movie releases, betting on potential blockbusters like Avatar, and box office busts like Gigli.
Investors would try to make money by guessing how much a film would earn during its first month at the box office.
The idea could help Hollywood studios spread around the risk in case they get stuck with a flop and for an investor with a keen eye it could really pay off.
Before you tap what's left of your 401k though, you should know futures contracts come with a lot of risk. A bet on that new romantic comedy could easily turn into your own personal horror show.
But unlike the folks who spent ten bucks on Speed 2 Cruise Control, there's at least a possibility of a return.
That's a page from my notebook.
I'm Katie Couric, CBS News.
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