weather markets

Contracts that settle on a measurable weather outcome — most often a city's daily high or low temperature, or monthly heating and cooling degree days — creating a market-implied forecast that firms in energy, agriculture, aviation, and logistics can read for operational decisions.

Cluster: Business & Platforms

Related Concepts

• information aggregation — The process by which markets combine dispersed private knowledge into a single consensus price signal.
• forecasting accuracy — Measuring how well predicted probabilities match actual outcome frequencies over many events.
• price discovery — The process through which trading activity reveals the fair value or true probability of an event.
• market efficiency — How well prices reflect all available information, and how quickly they adjust to new information. In prediction markets, efficiency depends not only on payoff structure (no-arbitrage bounds from terminal payoffs) but on whether the protocol exposes payoff equivalences as executable primitives.

Articles about weather markets

• Prediction Markets Beat the Weather Forecast on Tomorrow's High Temperature by Alexander W. Crosier