Why Wall Street investors’ trading California water futures is nothing to fear – and unlikely to work anyway

The Conversation

Water is one of the world’s most vital resources.

So is there reason to freak out now that profit-hungry hedge funds and other investors can trade it like a barrel of oil or shares of Apple?

That’s exactly what CME Group recently did in California when it launched the world’s first futures market for water in December 2020. Put simply, a futures market lets people place bets on the future price of water.

Some people worry Wall Street’s involvement in trading water will disenfranchise the water rights of rural communities and lead to more scarcity of an already dwindling resource, thus driving up the price everyone pays.

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