Trading the Baltic Dry Index With BALT

As emerging markets around the world continue to boom, so will their thirst for commodities. Aside from the commodities producers themselves, investors can invest in how these materials are shipped around the globe. A recent IPO allows investors to bet on the leading barometer of how the shipping business is performing; Baltic Dry Index (BDI).

Set-up as “virtual” creation by Genco Shipping & Trading (NYSE: GNK) to acquire ships and pay dividends, Baltic Trading Limited (NASDAQ: BALT) has a unique business model. Most dry bulk shippers use contracts that last for months or years at a set price, Baltic charges customers based on the weekly average of the Baltic Index. That aligns revenue and dividends directly with the Index.

Shares of Baltic yield nearly 6 percent.

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