| Sourced From Bloomberg.com |
July 2 (Bloomberg) — European Union carbon traders bought a record amount of put options last month to protect themselves against declining prices for emission allowances.
They purchased put options on a record 24.2 million metric tons of EU carbon dioxide allowances, according to data compiled for Bloomberg by the European Climate Exchange in London. The put options included 14.1 million tons for the December 2009 contract, the most traded.
Buyers of put options profit when prices fall below an agreed strike price. EU carbon allowances for December have plunged 55 percent from a year ago as the recession pulled down economic output and demand for permits to emit greenhouse gas. Call options, which pay off when CO2 prices rise above an agreed strike price, fell to 3.1 million tons last month, the lowest since October 2008, according to European Climate Exchange data.
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