BEST BIDS TO BUY	1999: 50 tons @ $ 400/ton 2000: 100 tons @ $ 750/ton
BEST OFFERS TO SELL	1999: 50 tons @ $ 800/ton 2000: 50 tons @ $ 850/ton 2000-02: 100+ tons @ $1,100/ton
RECENT TRADE PRICES	none (1999) $ 875/ton (2000) $ 875/ton (2000) $ 900/ton (2000) $ 950/ton (2000) in chronological order
MARKET PRICE INDEX	1999 = $ 745/ton 2000 = $ 836/ton The Market Price Index (MPI) is derived by averaging the Best Bid, Best Offer, and Most Recent Trades.

How is the MPI Derived? The MPI, in $/ton, is derived by averaging the following: 1) the Best Bid - the highest price at which a buyer is willing to purchase at least 5 tons of NOx Allowances. 2) the Best Offer - the lowest price at which a seller is willing to sell at least 5 tons of NOx Allowances. 3) the Most Recent Trade - the price(s) at which NOx Allowances have been agreed to be transacted (NOTE: NOx Allowances have not yet been placed in Budget Sources' NATS Accounts, and thus trades cannot yet be "transacted". Until such time, the "Most Recent Trade" represents buyer(s) and seller(s) agreement(s) on price).

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January 2000 saw very little activity in the Spot Price of NOx Allowances. As can be seen from the graph above, prices have stagnated for almost three months. Traders, however, did attempt to breathe life into what was a fairly dead Holiday Season market with an early flurry of trades in Vintage 2000 Allowances. The first week of the new millenium saw some buying, with offers at $950/ton and trades at $975/ton. However, this bright start was tempered by the emergence of several sellers who hit bids at $950 and $900/ton and the offer price dropped to $875/ton. Despite the offer at $875/ton being lifted, the price has settled to a level of $750/ton bid at $900/ton offered. The offer price reflects the strength of selling interest in the market.

Somewhat puzzling is the general lack of interest being shown in trading vintage 1999 Allowances. While the 1999s are subject to Progressive Flow Control this year, it seems that opportunities could arise for astute buyers to take advantage of current low prices (as opposed to vintage 2000s) and build a bank of 1999s for compliance in future years.

Another indication of the present market sentiment is the predominance of options being traded. Call option sellers were plentiful as evidenced by a lowering of volatilities to around 50%. Put buyers have been keen to take advantage of the lower volatility to hedge any further downside risk. January 2000 has also seen savvy traders hedging their risk by selling and buying Zero Cost Collars. These transactions allow counterparties to lock in both their downside and upside price limits at no cost. For those of you who presently have your attention concentrated elsewhere, this strategy can be an effective and reasonably painless form of protection against any sudden price movements.

As the market closed on 02-08-00 Cantor Fitzgerald clients were seeking to sell a 60 ton stream from 00-02s at $1,100/ton.

Trade With the Cantor Environmental Brokerage Market Experts Cantor Fitzgerald Clients have used our market to transact over $2 billion NOx EAs, SO2 EAs, ERCs, DERs, MSERCs, RECLAIM Trading Credits, Greenhouse Gas Reductions, and Wastewater Credits across the USA and around the world.