Can you trade water as a commodity?
Like gold and oil, water is a commodity—and it happens to be rather scarce nowadays. So, as with any other scarcity, the water shortage creates investment opportunities.
Why is water being traded as a commodity?
Water has joined gold, oil and other commodities that are traded on Wall Street, as worries about the uncertainty of its availability in the future rises.
What exchange does water trade on?
Contract Specifications
| CONTRACT NAME | Nasdaq Veles California Water Index futures |
|---|---|
| BLOCK TRADE MINIMUM THRESHOLD | 25 contracts |
| LAST TRADING DAY | Business day prior to Final Settlement Day |
| FINAL SETTLEMENT DAY | Third Wednesday of the contract month if a CME business day, otherwise the next business day |
Why is water an important commodity?
Water is arguably the most important commodity on Earth. As important as crops, metals and energy are to the planet, none of them matter without water. Every agricultural crop that feeds the planet needs it to grow. Farmers couldn’t raise chickens, cows, pigs, or any livestock without massive quantities of it.
Why is Michael Burry investing in water?
He prefers water-rich farmland away from large governmental and infrastructural limitations. Burry has said in interview: “What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas.
Are water ETFs a good investment?
These ETFs do not invest in water as a commodity or in water rights. Instead, they focus on water resources companies. Water ETFs have underperformed the S&P 500, which posted a one-year trailing total return of 15.2% as of Feb. 15, 2022.
Should you invest in water?
Water is a vital resource with a finite supply, making it a valuable commodity used throughout the economy. Investors can attempt to capitalize on the growing trends in water renewal, conservation, treatment, and purification, by investing in water-related companies or index funds that invest in them.
Is fresh water a commodity or right?
Water belongs to all; it is not a commodity that can be legitimately privately owned. Water should be provided by governments; it is immoral to profit from its sale.
Is water a smart investment?
Investing in water could be a good long-term bet for those concerned about its sustainability. It is also a good option for environmentally focused investors. The Invesco Water Resources ETF (PHO) holds companies that create products designed to conserve and purify water.
Can you trade water futures?
As of December 2020, water officially started trading on the United States (US) futures market. Water joins other commodities such as oil and gold. The news comes as 2020 is revealed to be one of the hottest years in history, with water scarcity being one of the effects of temperatures raising.
How can I invest in water shortage?
Seven ways to invest in water:
- Invesco S&P Global Water Index ETF (CGW)
- Invesco Water Resources ETF (PHO)
- Invesco Global Water ETF (PIO)
- American Water Works (AWK)
- Ecolab (ECL)
- Danaher Corp. (DHR)
- Nasdaq Veles California Water Index (NQH20)
Is water a commodity?
In this commodity guide, we explain the relevance of water as a commodity and why it’s the most important yet illiquid commodity in the economy. We also explain what makes water valuable, how it’s treated and purified, and what drives the prices of water as a commodity. Interested in how water is traded?
How do retail traders buy water rights?
Retail traders may purchase water rights in the form of company shares, or water futures. One such water futures product is CME’s NSH2O. See the different ways to trade water to learn more.
What happened to the Carbon Trade Exchange?
The lack of a formal agreement by the United States to reduce GHGs led to its demise. Carbon Trade Exchange (CTX): This is the world’s first and largest electronic exchange for trading voluntary carbon offsets.
Is it possible to trade water?
However, the lack of liquidity in futures markets makes a physical trade in water moot for most areas of the world. Severe drought conditions, which are more common in a dry country like Australia, can cause major spikes in water demand, while periods of excessive rainfall can reduce demand.