The DBOR From Cantor Exchange
The Cantor Exchange plans to offer movie box office futures contracts (the “DBOR”) for trading starting late April 2010. DBOR stands for Domestic Box Office Receipts. Understanding the DBOR is crucial for those interested in investing in this new marketplace. This is the first in a series of articles that will attempt to demystify the DBOR. Before investing in any DBOR, you should fully acquaint yourself with these complex products by studying the information provided at the Cantor Exchange, conducting additional research and seeking professional financial advice.
What Is A DBOR In Plain Language?
A DBOR represents the gross box office receipts of the underlying film in the US and Canada, beginning on the date the film is shown in at least one theater in North America and concluding four weeks after the film in being shown in at least 650 theaters in North America. The four week period, during which the film is shown in at least 650 theaters, has to start on Monday and end on a Sunday. One exception: When certain US holidays fall on Monday, the holiday Monday is considered part of the prior release week and the next release week starts on Tuesday.
Key Points To Remember:
1. The DBOR represents gross box office in the US and Canada.
2. The time period during which gross box office receipts are calculated for the DBOR starts on First Release Date (definition below) and ends after the underlying film has been in wide release (at least 650 theaters) for a four week period that starts on a Monday and ends on a Sunday. [See definition of DBOR Determination Period, below, for what happens if wide release is not achieved.]
3. The DBOR continues to trade for a short period after the four week wide release ends. The “Last Trading Day” (defined below) will not be earlier than the Tuesday following the close of the DBOR Determination Period.
DBOR Contract Terms And Conditions
DBOR details are explained more fully in the Contact Terms and Conditions for Domestic Box Office Receipts (which you should read in full). The Definitions included in the Contact Terms and Conditions include, among others, the following:
“DBOR” means the aggregate gross domestic box office receipts in the United States and Canada in U.S. dollars as compiled by Rentrak Theatrical and/or Nielsen EDI and published in Variety Magazine (or such other publicly available source or sources as may be designated by the Exchange from time to time).
The “DBOR Determination Period” for each DBOR Contract begins on the First Release Date and concludes at the end of the fourth (4th) Release Week after the underlying film title achieves Wide Release status. In the event that the underlying film title fails to achieve Wide Release status prior to the end of the twelfth (12th) Release Week, then the DBOR Determination Period shall conclude at the end of such twelfth (12th) Release Week.
“First Release Date” means the first date on which a film title is being shown to the public in at least one theater in North America that reports DBOR data to Nielsen EDI or Rentrak Theatrical.
“Last Trading Day” means the last Trading Day on which the relevant DBOR Contract trades on the Exchange before settlement; provided, that the Last Trading Day shall under no circumstances be any earlier than the Tuesday following the close of the DBOR Determination period.
“Release Week: means the period beginning on any Monday and ending on the following Sunday, except that if such Monday is any of New Years Day, Martin Luther King Day, President’s Day, Memorial Day, the 4th of July, Labor Day or Christmas Day in the United States, then such Release Week shall begin on Tuesday and such Monday shall be part of the prior Release Week.
“Wide Release” means a film title that, as of the relevant time of determination, is being shown to the public in at least 650 theaters in North America, as reported by Nielsen EDI or Rentrak Theatrical.
