Abstract: A system and method for trading electrical transmission rights are provided. The system and method employ an exchange mechanism based on unequal quantity exchange rates between sets of transmission rights. The exchange encourages efficient trading between market participants. In addition, the system and method permits participants to trade only one or a few transmissions rather than a portfolio of rights.

Abstract: There is described herein a system for creating markets for risks associated with an externality. The market may provide for transfer of tradable securities whose value is contingent upon the occurrence of an externality, and that are coupled with an activity permit. Activity permits may be purchased by market participants, and are coupled with a prescribed activity that the holder may undertake. The contingent value and the maturity of the security may be based upon an estimate, at the time of issue, of the likelihood of, cost of, and/or time to an externality. After the issue of a security, the activity permit and the contingent value may be traded independently. Optionally, the activity permit and the contingent value may be restricted to a single holder.