Movie Futures Trading Okayed: Sounds Like Fun

Well, the movie industry does not like it but it would be an interesting way to make money if you are knowledgeable about the movie industry.

Backers of the box-office exchanges say those markets would help Hollywood manage risk in a notoriously hit-or-miss business.

Investors would be able to hedge against potential flops by preselling a share of future box office receipts. The exchanges could even guard against likely hits, such as the upcoming "Harry Potter" and "Twilight" sequels, falling short of projections. If a movie doesn't do as well as expected, investors would at least be guaranteed revenue from those presales, known as futures contracts.

Although there will be added risk of the movie flopping due to the unpredictability of the stars. For instance if Kristen Stewart from Twilight was arrested for drug possession or something you might see your Long Twilight Eclipse Futures fall apart. Then what if some unscrupulous Short Money Hedge Fund guy planted the drugs in her car to frame her so that the movie tanks? Well, maybe not so much depending on how permissive the Twilight fans are.

Also I wonder how liquid this market will be? I mean being long Matt Damon movies or Tyler Perry movies would be pretty easy money. It would take a real technician to pick the next Paranormal State, Blair Witch Project, or Juno. It would be cool to see buzz about a movie that is months away because the trading picks up on their contracts.