IFEX offers two commodities not just one:
Buying & selling protection and trading price.

Buying & selling protection

• Buying or selling protection in derivative form can be done either on screen or through an interdealer broker.  In the latter case,  the price is negotiated off exchange and then put on exchange as a Block Trade.
  
  
• The use of a transformer/fronting arrangement would also suite many types of Protection Buyers.
  
  
• This kind of trade offers excellent security through the clearing process.
  

Price Trades (and Hedges)

• Such trades permit trading of price with little or no insurance risk if conducted outside of the relevant hurricane season.
  
  
• The 2010 ELF contracts will only be more significantly exposed to insurance risk from June 1 2010 until November 30 2010, and will be subject largely only to price risk outside the hurricane season.
  
  
• Outside the hurricane season such trades have very low margin – 2% of contract limit/notional value for the Protection Buyer and 8% for the Protection Seller.
  
  
• ELF prices will respond to news concerning:
  
   - catastrophes and major losses affecting the international reinsurance market
  
   - major entries and exits from the international reinsurance market
  
   - developments in capital markets, but note that rising bond and equity prices may tend to depress
      prices in reinsurance markets. The reverse is also true.