1. An Introduction

2. HEDGESTREET An Enormous Need Most major economic risks faced by individuals and organizations cannot be efficiently traded –One example is the value of real estate holdings --- given that a typical American family’s largest asset is its house Current financial markets are inadequate to deal with risk –Stock markets: Claims on corporate profits –Futures markets: Narrow range of instruments –The insurance industry: Limited policies Risk instruments are available to only a sophisticated few – OTC desks within large investment banks – The fragmented re-insurance market

3. HEDGESTREET “The nominal value of over-the-counter derivatives now exceeds $100 trillion, 60% of which is handled by a mere six dealers, including J.P.Morgan and Citi Group.” The Economist, May 18th, 2002 "When [trading volume] concentration reaches these kinds of levels, market participants need to consider the implications of exit by one or more leading dealers." Alan Greenspan, 2003 – The global volume in over-the-counter (OTC) derivatives in interest rates, currencies, equities and credit derivatives totaled $149 trillion for 2003. The semi-annual survey by the ISDA -Worldwide trading volume in futures and options on all derivatives exchanges rose sharply in 2003 to $874 trillion. Bank for International Settlements The Market

4. HEDGESTREET HedgeStreet offers the first trading platform on which the established derivatives marketplace can join with millions of other members to directly trade a wide variety of risks with each other - risks that currently cannot be efficiently hedged through existing securities, commodities or insurance markets: HedgeStreet extends the depth, variety, and number of derivatives that are tradable HedgeStreet extends derivatives trading to retail traders HedgeStreet Market

5. HEDGESTREET Market Validation: Retail “Retail trade holds huge, huge potential. And even if we only captured 10 or 20 percent of retail, it would be very meaningful in the growth of our marketplace … Korea – it created a very small index, and it trades more than any other product in the world.” -- Leo Melamed, former Chairman of the CME Korean Example of Success: Kospi 200 Index Small retail oriented index Fastest growing index in the world 15x larger that Nikkei 225 3x larger than S&P 500 66% of traders have been retail traders

6. HEDGESTREET The Hedge Fund Opportunity There have been an explosion of new market participants (9000 Hedge Funds, 30% growth rates, controlling 1 trillion in aggressive capital) They are running out of trading opportunities (fixed income arb, convertible bond arb crowded out) They need new products to allow them to develop new strategies The need new products to enable them to take new and unique views and generate alpha They are a good target market (information centric, easy to locate, leveraged and aggressive, nimble, well capitalized, hungry, pay 30% of all i-banks commissions business)

7. HEDGESTREET HedgeStreet Exchange HedgeStreet New Instruments Third-Party New Instruments Revenue Model Aggregation of Trading Volume Revenues Individuals Exchange Members InstitutionsCorporations

8. HEDGESTREET Going To Market Strategy Target financially aware retail customers and general retail customers at large (retail channel): –List products of interest –Channel partners - related markets Target institutional partnerships (institutional channel): –Listing partners –Market makers