The uncertainty roiling the financial markets in recent weeks raises questions about the market for fine art, which has risen dramatically in recent years — and may also be ripe for a correction. But unlike holdings in other sectors, investors have no way to hedge against a fall in the art market. No derivatives market exists for works of art, unlike weather, or commodities, or, more recently, real estate prices.

The founders of a new art “hedge fund,” however, envision a day when investors in the art market may be able to buy Impressionism futures, instead of an actual Monet. The Art Trading Fund, based in London, plans to develop an art market index — like the Dow or the S&P 500 — on the basis of which people could bet on which direction the market will go, one of the founders said in an interview.

“That’s a long-term strategy,” Justin Williams said. “We’re developing it with a big private institution and a couple of big players in the art market and an academic.”

In the meantime, the managers of the Art Trading Fund, which was profiled in this month’s Art+ Auction, have identified stocks they believe have a high correlation to the art market, such as Sotheby’s and luxury goods companies like Richemont, and are buying put options on them (options to sell at a fixed price). The idea is that, if the art market falls, these stocks will fall, too, and the fund can turn these options into cash.

But the Art Trading Fund does not give investors a real hedge, the corporate-raider-turned-art dealer Asher Edelman noted, since the art market and stock in companies such as Sotheby’s aren’t perfectly correlated. Sotheby’s stock could fall for reasons other than an art market decline, like bad management, high fees discouraging people from consigning, or, as happened earlier this month, a drop in the overall stock market.

In any case, the Art Trading Fund’s strategy of shorting these stocks, in addition to buying and selling art, distinguishes it from numerous other art funds, which since the 1970s have formed with great fanfare and subsequently dissolved. To anyone used to thinking of art as something that people buy in order to enjoy looking at it in their homes, the mechanics of an art fund can be a bit jarring. It is like a mutual fund, except that what it buys and sells is art instead of stocks. The investors are not necessarily collectors or aesthetes, simply people who want to diversify their investment portfolio.

Some people in the worlds of art and finance view such funds with skepticism. “If they are run in an entrepreneurial fashion without six or seven layers of various advisers and dealers and so on, they can be successful,” Mr. Edelman said, noting as an example a private fund started in the early 1990s by the former managing partner at Goldman Sachs, Robert Mnuchin. But most funds can’t point to their successes with rigorous accounting — meaning realized gains minus unrealized losses — and they “have structured themselves to where I don’t think they’ll make any money,” Mr. Edelman said. He added that one of the largest currently operating funds, the Fine Art Fund, has approached him several times about investing, but he has chosen not to do so.

Like the Art Trading Fund, the Fine Art Fund is managed out of London. But it is officially registered in Delaware and regulated by the U.S. Securities and Exchange Commission, whereas the Art Trading Fund is officially registered offshore, in Guernsey, Channel Islands, and regulated by the Guernsey Financial Services Commission.

The Fine Art Fund usually buys one or two million dollars worth of art works every week and generally holds them for a year before selling, its chief executive, Philip Hoffman, said. Some of the art the fund owns is rented out to investors, and sometimes pieces will be loaned, free of charge, to museum exhibitions. But at any given time, 80% of the work is in a high-security warehouse in Switzerland.

While the Fine Art Fund buys what Mr. Hoffman referred to as “rarities” and holds them for a year, the Art Trading Fund is focused on the mid-market and keeps works only a few months. A significant part of the latter’s business is in the work of living artists, to whom the fund has a relationship like that of an exclusive dealer for an artist. Mr. Williams said the fund has 10 artists on contract. It has the exclusive right to buy their art; every six months, the fund’s partners look at each artist’s production and buy as many pieces as they want. What they don’t want the artist can’t sell elsewhere.

“It’s a guarantee for them,” Mr. Williams said. “Twice a year, they have a liquidity event. They know they’re going to be paid on time,” he said, adding: “Galleries usually take a long time to pay them.”

Mr. Williams wouldn’t name the artists on contract, because the fund wants its transactions to be anonymous. But it’s safe to say they’re not artists you’ve heard of. “We’re not looking for the next Damien Hirst,” Mr. Williams said. “We’re not looking for risk. We look at each artist as a mini-business. We look at their track record for the last three years, and if they have a following.” They currently have 15 more artists lined up to join, he added.

In the meantime, Mr. Williams said that he and his partners, Chris Carlson and Roy Petley, are working to develop a reliable art market index — or, perhaps, a set of indexes for different segments of the market, like Impressionists, Old Masters, etc. — on the basis of which they could do a true hedge.

A few art market indexes already exist. The best known is the Mei/ Moses Fine Art Index — actually a group of indexes in the categories of Old Masters and 19th century, Impressionist and modern, postwar and contemporary, and American before 1950 — developed by the economists Jianping Mei, of NYU’s Stern School of Business, and Michael Moses. The Mei/Moses indexes, like the Case-Shiller Home Price Indexes, which are used for the housing derivatives market, are based on repeat transactions — that is, on paintings, or houses, that have sold more than once. But the Mei/Moses indexes are based only on auction results, not on the equal or larger number of private sales. Since dealers and collectors don’t disclose the terms of private art sales, it will be extremely challenging to develop a reliable index. Mr. Williams said that he and his partners are hoping to use the information from their own transactions as well as those of other dealers in their network.

In an interview, Mr. Moses said he believes people will eventually be able to trade options or futures based on an art market index. But one problem he noted is how often such an index can be updated to reflect current trends. The Case-Shiller Indexes are updated monthly, but because of the smaller number of transactions in the art market than in the real estate market, the Mei/Moses indexes are only updated annually.

The other problem, Mr. Moses said, is: “Are there going to be enough people who are interested in trading this kind of index?” Without enough investors, a market in art futures would not be liquid. “There are probably a lot of people who would want to take a long position” — that is, betting that the art market will go up, Mr. Moses said. “The more difficult thing is figuring out who’s going to bet short,” he said, though he noted that a person with a lot of art might want to short the index, to protect against losses in case of a market fall.

The art market lags behind the stock market in its trends, so how the panic over subprime mortgages will affect the price of Monet is yet to be seen. But anyone who can provide liquidity to a market that has none — whether by buying up downgraded mortgages or, potentially, by creating a market in art futures — stands to make a lot of money. “There’s always a lot of profit supplying liquidity in a market that doesn’t have it and wants it,” Mr. Edelman said. “And given what’s going on in the world, that’s probably where things are headed,” he added. “It’s the beginnings of a major liquidity squeeze. We have had a world awash in liquidity and in a matter of days, that’s gone.”