BEST BIDS TO BUY	1999: 50 tons @ $300/ton 2000: 25 tons @ $600/ton 2000-02: 50 tons @ $550/ton
BEST OFFERS TO SELL	1999: 50 tons @ $700/ton 2000: 50 tons @ $900/ton 2000-02: 100+ tons @ $800/ton
RECENT TRADE PRICES	$715/ton (2000-02) $685/ton (2000) $675/ton (2000) $745/ton (2000) $740/ton (2000) $730/ton (2000) $700/ton (2000) $720/ton (2000) $730/ton (2000) $730/ton (2000) $775/ton (2000) none (2001-02) none (1999) in chronological order
MARKET PRICE INDEX	1999 = $500/ton 2000 = $741/ton The Market Price Index (MPI) is derived by averaging the Best Bid, Best Offer, and Most Recent Transaction.

NEW DISTRIBUTION NOTICE: Starting this month, the preferred distribution of Cantor Environmental Brokerage Bulletins will be by e-mail rather than by facsimile. To ensure that you get these bulletins in the future, please provide your email address to: [email protected] and type in the subject line, "Add me to the NOx Budget Bulletin list".

NOx Allowance prices remained stable in February, although there was a flurry of trades recorded on February 18th. While it was considered by most to be a surprise, six trades were reported and the price still failed to break out of its tight range of $700/ton bid to $750/ton offered. Several traders have lamented the lack of interest being shown in the market and are looking to the upcoming Ozone Season to provide some impetus.

Once again, Options have been somewhat active with trading in Put Options generally being the favored vehicle. Volatilities were surprisingly higher than last month with most Options trading in the 55-60% range. Those of you who have been contemplating an entry into the Options markets have several strategies to consider adopting. The following outlines some of the different kinds of Options’ strategies available.

• Selling Covered Call Options can help you realize some profit on your bank of allowances during this period of inert prices. The term “Covered Call” would apply in the case where you already possess aAllowances and are not required to make any purchases to cover your Option exposure.
• Alternatively, if you need to purchase allowances, selling Put Options effectively reduces the final price you pay for allowances when you decide to purchase.
• You can also limit your risk liability by buying Puts and Calls, whichever suits your situation.

Should you have any questions or comments on implementing a trading strategy, Cantor Fitzgerald would be pleased to assist you with your deliberations.

PFC Number Due This Week! – EPA is finishing up its reconciliation of the NOx Budget accounts for the 1999 ozone season. When reconciliation is complete, the number of used and unused vintage 1999 allowances will be known. With these numbers in hand, EPA anticipates that it will release the Progressive Flow Control (PFC) ratio to be applied to vintage 1999 allowances if they are used for compliance in the year 2000 ozone season.

EPA Wins NOx Sip Call Lawsuit – On Friday, March 3, 2000, the U.S. Court of Appeals for The District of Columbia decided in favor of the US EPA in a lawsuit challenging the planned NOx SIP Call rule. The SIP Call, according to EPA, requires 22 States and the District of Columbia to submit State Implementation Plans that address the regional transport of ground-level ozone. EPA believes the actions directed by the SIP Call will decrease the transport of ozone across State boundaries in the eastern half of the US. The rule requires emission reduction measures to be in place by May 1, 2003. The NOx SIP Call builds upon analyses conducted by the Ozone Transport Assessment Group (OTAG) and applies the OTC NOx Budget program (the current program) to a broader region. While this ruling may reduce the uncertainty surrounding the viability of the SIP Call, as well as its implementation date, litigants could appeal the decision to the Supreme Court. Interested parties should keep a close watch on this subject.

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.