A numbers game: report-based contracts in vogue.

Both speculators and hedgers place a great deal of importance on economic statistics. Trades are often made and hedged based on where a report will come out--be it employment numbers, grain carryout or energy inventory statistics.

But, with the obvious exception of the Federal funds

The options, which will be traded electronically in an auction format and cleared through Nymex, will help traders hedge the impact of reported oil and gas inventories released each week by the Energy Information Administration (EIA).

The inventory statistics auction will be held the night before the report is released and an additional auction will take place the morning of the release. The change in inventories determines which options are in the money and which are out of the money. Premium collected from traders holding out of the money options is paid to those holding in the money options.

Chris Edmonds, SVP of ICAP Energy, says that the options will allow energy market participants to protect themselves against outlier numbers or monetize their research. "People spend millions of dollars attempting to know that storage number, this instrument allows them to monetize all that work," he says.

Goldman Sachs and Deutsche Bank have launched similar economic derivatives options based on non-farm payrolls.