Roosevelt University Students Propose Futures Market for Space

JLN with Bryan Rodriguez, Luis Arreola and Justin Shea
John Lothian

John Lothian

Executive Chairman and CEO

Roosevelt University’s CCCF honors student Luis Arreola and former Professor Bryan Rodriguez are pioneering a concept that might shape the future of near earth space commerce. Merging Arreola’s research on water futures with a mentor’s study of space markets, they have embarked on an ambitious project: a futures market for space commodities.

In an exclusive interview with John Lothian News, along with insights from Roosevelt Assistant Professor of Finance Justin Shea, the trio discussed their innovative project. Rodriguez and Arreola expressed their preference to investigate space markets from the comforts of Earth, despite having pondered the adventure of space travel. Rodriguez, a Roosevelt alumnus, collaborated with Arreola while serving as a professor at the university. He has since joined FalconX, a platform catering to institutional investors with cryptocurrency trading, credit, and clearing services. Meanwhile, Arreola, having completed his bachelor’s degree at Roosevelt, is currently pursuing his MBA there.

Although the duo didn’t directly collaborate with NASA, they relied heavily on the space agency’s vast data reserves. Citing a significant reduction in launch costs in recent times, Rodriguez emphasized the growing feasibility of space markets. He mentioned commodities like fuel, air, and other life-support essentials as potential tradable assets in this futuristic marketplace.

Shea underscored the importance of air and water markets in any low orbit space commerce, given their critical role in life support and propulsion. Tapping into historical data, Rodriguez referenced the 2018 FAA Launch Compendium, which lists about 130 distinct launch vehicles spanning over six decades.

Both students acknowledged Elon Musk’s contribution to lowering launch expenses. Arreola highlighted that the burgeoning space tourism industry also plays a part in driving costs down.

Shea discussed the pivotal role of transportation in determining costs in such markets. On the operational side, Rodriguez and Arreola delved into the intricacies of the market’s structure and potential currency. Arreola stressed the need for a delivery terminal, with Shea suggesting its location might be in space, while trading activities would remain earthbound.

The significant challenge lies in the launch costs, specifically the expenditure required to exit the Earth’s atmosphere, Rodriguez pointed out. As for storage costs, they remain an uncertainty due to the yet-to-be-determined nature of the storage terminal. Rodriguez floated the idea of using a decommissioned space station as a possible delivery terminal.

An artist's rendering of a space station.

An artist’s rendering of a space station.

Potential participants in this space market? Gas stations of space and lunar mining entities, among others, Arreola noted. Shea mentioned anyone dependent on air and water in space would naturally join the buyer’s list.

Rodriguez predicts the emergence of an OTC market preceding a more structured futures market. He also presented a study showcasing an annual launch cost reduction of $250 per launch, based on a simple regression analysis across the whole time series of launch costs, suggesting a brighter horizon for space-related endeavors.

Additionally, Shea and Rodriguez touched upon prospective career paths in space markets. The trio also shared their favorite space films and highlighted the challenge of space debris in their comprehensive research.

 

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