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Weather Future
(redirected from Weather Futures)

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Weather Future
A weather derivative in which the buyer is required to pay the seller $20 for each day in a given month that the daily temperature is below 65 degrees (a heating degree day) or above 65 degrees (a cooling degree day), depending on the nature of the contract. A weather future allows a business to hedge against potential losses resulting from an unexpected change in weather. Energy companies are the most common sellers of weather futures; they have become relatively popular investments.
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Then in 1999, the Chicago Mercantile Exchange (CME) started to trade weather futures contracts, spurring the expansion of this nascent sector.
Taming mother nature: how weather risk management has helped offset ... by Cooper, Valerie / Risk Management
l]), (3) while the hedger using linear basis hedging (hedging using the combination of exchange traded weather futures and OTC basis weather forwards) has a final wealth given by W = q - E[[h.
Handling weather related risks through the financial markets: ... by Golden, Linda L.; Wang, Mulong; Yang, Chuanhou / Journal of Risk and Insurance
From the same people who run weather futures trading, the hurricane futures market could prove to be a viable tool for reinsurers.
Look into the crystal market: hurricane market launches new ... by Brodsky, Matthew / Risk & Insurance
 
 
 
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