I read that last week in some online publication, but can no longer recall which. The article mentioned that it will be financially settled to avoid exposure to the radioactivity. The thing that strikes me is, there are only so many utilities that use this stuff, so I anticipate that it will be a contract similar to power, where it is mainly traded by the big institutions, and at least in the short run do not expect a great deal of liquidity and therefore speculator participation...
Here is the link I mentioned above: http://www.nypost.com/seven/0425200...rgy_behind_uranium_business_zachery_kouwe.htm GC
Ok so I see bid/ask 13800/14395 in UXM7 now. The last spot price is US$113.00/lb. One UXM7 contract is 250/lb, with a price of $14395/250 that equals to ~$57.50/lb. What am i missing out?
It's CASH SETTLED, which means there may not be perfect pricing w/ the underlying commodity. Until arbitragers get in the game, it won't be perfectly priced. And like someone else said in this thread, there's very few speculators in the game. A lot of the arbitraging is done by the same people who speculate.
The price is $138.00/$143.95 which is a per pound price, so the contract size is $138/lb. * 250 lbs. = $34,500 http://www.nymex.com/UX_spec.aspx