Blog: California’s new futures market for water
On December 7, 2020, financial futures based on California water prices began trading. This post is a short introduction to these water futures. First, what’s a future? A future is a type of contract. It obligates the seller, who receives money, to provide some good at some future date, to the buyer, who pays money now to lock in the right to buy that good at that price. Humans have been using futures for thousands of years, primarily for agricultural products. But in recent years the futures markets have been expanding.
Related article:
- Sierra Club blog: What’s the Sierra Club California Water Committee and Why Do We Need It?