Hollywood Stock Exchange (HSX)

HSX.com was founded in 1996 by investment bankers Max Keiser and Michael Burns, now vice chairman of Lions Gate (also the studio that Icahn wants to buy for his own portfolio).

In May 2001, Cantor Fitzgerald, a leading financial services provider, acquired the Hollywood Stock Exchange.

Cantor Fitzgerald's corporate headquarters and New York City office, on the 101st-105th floors of One World Trade Center in Lower Manhattan were destroyed during the September 11, 2001 attacks by a highjacked airliner. They lost 658 employees, or about two-thirds of its workforce, considerably more than any other of the World Trade Center tenants or the New York City Police Department and New York City Fire Department.

See related article : Can Twitter Predict the Next Hollywood Blockbuster?

Update:

6/14/10 - The Commodity Futures Trading Commission approved a proposal from Media Derivatives to be the first company to trade futures on motion pictures. Media Derivatives is one of two entities which, along with the Cantor Exchange, had sought CFTC approval to set up the market. Media Derivatives plans to issue futures on the Sony's film "Takers," scheduled for release Aug. 20. The panel is expected to decide the Cantor Exchange's application later this month.

5/13/10 - The Commodity Futures Trading Commission (CFTC) said it will hold a public meeting on May 19 to consider the trading of futures and binary options based on motion picture box office receipts. The Commission will hear presentations from representatives of the Media Derivatives Exchange (MDEX), Cantor Exchange (Cantor), the motion picture industry and other parties.

On April 20, over the protestations of the film industry, the CFTC approved Cantor Fitzgerald’s application as a contract market and derivatives clearing organization. However, as with its April 16 approval of a similar application by Media Derivatives, CFTC refrained from authorizing the actual trading of financial derivatives based on motion picture box office receipts.

Whereas the CFTC may be hesitant, Senator Blanche Lincoln, D-AR, has been more decisive. Lincoln--who as Chairwoman of the Senate Committee on Agriculture, Nutrition & Forestry has jurisdiction over futures markets—has unveiled financial reform legislation which contains language that favors the film industry. Among other things, her Wall Street Transparency and Accountability Act of 2010 amends the term “commodity” to specifically exclude motion picture box office receipt and related contracts.
 

4/21/10 - A Senate committee approved a proposed ban on trading futures relating to the box-office performance of motion pictures.

The Senate Agricultural Committee kept the provision in that would exclude box-office futures as a commodity, thus disallowing them from being traded on the open market. The provision is part of the Wall Street Transparency and Accountability Act, which has yet to be voted on by the full Senate and the House.

Within the last week, the Commodity Futures Trading Commission has approved two entities as "contract markets" -- Media Derivatives and Cantor Futures -- but has yet to approve the trading of box-office futures.

The two groups wanted to start trading box-office futures in an effort to share the risk on Hollywood films, which often run into the hundreds of millions of dollars in production costs.

But lawmakers such as Agriculture Committee Chairwoman Sen. Blanche Lincoln, D-Ark., and Hollywood studios have come out against the idea. The Motion Picture Association of America, which represents major studios, says that films cannot be placed in the same categories as other commodities like wheat because there are no interests on the negative side of the contracts.

In essence, the group says that film investments are more like stocks, and if an investor shorts box-office futures that could have an adverse effect on a film's performance in theaters prior to the public getting a look at the product.

"We thank Chairman Lincoln and the agricultural committee for seeking to put an end to plans that would allow wagering on box-office futures," Bob Pisano, interim MPAA chief executive, said in a prepared statement. "We believe these plans are based on a faulty understanding of the film business and could cause real financial harm to both the film industry and other Americans drawn in by an online gaming platform that could be easily manipulated."