Will Hollywood Futures on the CantorExchange Kill Hollywood?

05/10/2009 05:00 am ET | Updated May 25, 2011

Bond trader Cantor Fitzgerald issued a press release today announcing the coming release of Hollywood box office futures contracts.

Cantor Fitzgerald has filed an application with regulators to launch an exchange that will allow users to hedge and speculate on the financial performance of movies.

Cantor says that subject to approval from the Commodity Futures Trading Commission (CFTC), its exchange's first traded product will be "Domestic Box Office Receipt" contracts.

The contracts - expected to be listed in the first quarter of 2009 - will offer film finance professionals and traders an opportunity to hedge and speculate on the ticket sales of major film titles.

Here's what I predict... Cantor Exchange/HSX futures will actually drive the prices of stars, films, marketing and the industry as a whole DOWN, just like introducing futures contracts in Japan in 1990 (traded in Chicago) top-ticked that market and it dropped it from 40,000 to 8,000 and it never recovered.

Hollywood studios will be able to 'short' their rivals stocks/movies and thus drive down prices (and perceptions) down - driving all values for everything lower across the board in tinsel town.

This is NOT GOOD for Hollywood monopolists. What file sharing leaves behind will get blown apart by studios shorting each other's projects trying to drive 'perception.'

Just like in Japan: cartels and Keiretsu who supported each other for decades turned on each other when annonymous Nekkei futures traded in Chicago gave them an opportunity to short each other without 'losing face.'"