Water is an essential commodity and a fundamental precursor for human life. Historically, it’s treated like a public good and is highly subsidized by the government. This can hinder price discovery in markets, which ultimately disjoints supply from demand. Consequently, water has been very cheap, even in regularly arid areas like California or Nevada. Many people believe that water should be traded like other commodities.

In late 2018, the Nasdaq Veles California Water Index began tracking the prevailing market price for water transactions, priced weekly in US dollars per acre-foot. Although water won't swing global financial markets like oil or gold does (it's too cheap and heavy to trade across long distances), trading water more locally can aid in price discovery/uncertainty and waste mitigation. Starting in December 2020, futures can now be traded on the index.

The current spot price of water on the NQH20 in September 2021 is above $900, up from $500 in September 2020 and $200 in September 2019. In the past, an acre-foot of water from the Colorado River was quoted at $1200 and an acre-foot of water from a desalination facility was quoted at $2200.