Question 1

How do weather markets work?

Accepted Answer

Most ask which range a measurement will fall in, such as the highest temperature at a named weather station on a given day. Each range has a price, and you buy shares in the range you think is right.

Question 2

How are the odds on weather markets set?

Accepted Answer

By traders, who usually follow the latest forecasts. As the day approaches and forecasts converge, prices for the likely ranges rise and the others fall.

Question 3

How do I get paid and how little can I trade?

Accepted Answer

The minimum order is 1 in shares. When the market is settled, every share of the correct range pays $1 and every other share pays nothing.

Question 4

What data settles a weather or climate market?

Accepted Answer

The data source in the rules, for example a specific station’s reading or a national weather agency’s report. Settlement can wait until that source publishes its final figure.