Weather Trading on CX
Weather has an immense impact on economic activity:
In 2017 (as of October 6), there have been 15 weather and climate disaster events with losses exceeding $1 billion each across the United States. These events included 1 drought event, 2 flooding events, 1 freeze event, 7 severe storm events, 3 tropical cyclone events, and 1 wildfire event. Overall, these events resulted in the deaths of 282 people and had significant economic effects on the areas impacted. The costs for Hurricanes Harvey, Irma and Maria are still being assessed.
Congress is expected to pass a $36.5 billion hurricane relief bill to assist Puerto Rico and other storm-ravaged locations in the US, pushing federal spending on weather-related disasters over $50 billion in 2017. Over the last decade, “extreme weather and fire events have cost the federal government over $350 billion”, says the GAO, citing data from the Office of Management and Budget.
According to Fortune magazine “Weather is one of the top 3 topics S&P 500 companies talk about on earnings calls.”
Even non-catastrophic weather can have a huge impact on business. It affects customer behavior, operations, logistics and of course the bottom line.
CX offers digital weather contracts based on various weather phenomena. These contracts offer limited risk and fixed payout to participants, making sure they are not unnecessarily exposed in case the market moves. The minimum contract size is only $1, which affords ultimate flexibility in structuring coverage for the right amount of risk.
The contracts are based on indices that the exchange constructs from reliable and trustworthy data sources such as AccuWeather and the National Weather Service.
Monthly contracts are available for trading both outside and inside the forecast window.
Weather Contracts and Platforms
|Atlantic Named Storm Landfall||Available for every ZIP code along the eastern seaboard of the Continental United States.||www.tradewx.com|
|Monthly Aggregate Rainfall||Initially available at 24 different levels in 55 locations across the USA with the ability to add more on demand.||www2.tradewx.com|
|Weekly Rainfall Day Count||Offer payout in case it rains above a pre-set limit, at least 1, 2, 3, 4, 5, 6 or 7 out of the 7 days in the contract. Initially available for locations in relative proximity of Atlantic City, NJ.||www2.tradewx.com|