Environment - Carbon Credit Trading is the New Derivatives Game
Stock options, move over and make room for "carbon credits" please. Technically speaking, "carbon credits" (CC) are not true "derivatives" of course since, unlike stock options, they do not have an "underlying asset" or "instrument." A "carbon credit" is basically the "right to pollute" sold by those less-polluting companies to those who do not, for one reason or another, want to curb their carbon dioxide emissions yet. Their prices probably rely more on the laws passed by legislative bodies in respective parliaments than on net corporate worths, any technical ratios or interest rates. The market to buy and sell such credits is especially hot in Europe where most countries have signed the U. ...
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