Rain, monthly average temperature and drought as NOAA publishes them, with the listed strikes drawn at the month each contract settles. Past the end of each record a dashed line carries that calendar month’s usual value forward, which is a climatology and carries no information about the weather in that month. Drag across a chart’s history to fit a straight line; double-click to clear. Hover the series for the value at a point, or a marker for the contract’s quote; click a marker to open that contract on IBKR.
These contracts are written on figures NOAA publishes for a whole month, and each pays one dollar if the published figure comes in above the stated threshold. ForecastEx lists monthly rainfall at New York, Chicago, Houston, Miami and Seattle, monthly average temperature at New York, Chicago, Los Angeles, Dallas, Houston and Miami, the monthly count of tornado reports in the United States, counts of severe hailstorm and severe windstorm events, hail and thunderstorm activity at Austin, Dallas, Oklahoma City and San Antonio, average and maximum wind speed at Boston, Chicago, Dallas, Miami and San Francisco, and how much of the United States is in drought.
Each panel above draws the record as NOAA posts it, with the listed strikes at the month each contract settles. Past the end of a record a dashed line carries that calendar month’s usual value forward, which is a climatology and says nothing about the weather in the month being priced. Daily high and low temperature contracts at individual stations are on the weather map.
Rainfall and monthly average temperature come from the NOAA Climate at a Glance city time series, drought coverage from the United States Drought Monitor, and the severe weather counts from the Storm Prediction Center’s preliminary storm reports, whose monthly totals are what the tornado, hail and windstorm event contracts settle on. A month’s figure is published after the month ends and a contract settles on the figure published for the month it names, so a contract on a month under way is priced against a record that does not exist yet. A preliminary count is revised, and where a panel shows one the page says so.
Each pays one dollar if the published figure comes in above the stated threshold and nothing if it does not, so its price in cents is the market’s probability of that outcome. There are no sellers on this exchange. A participant buys Yes or buys No, and the two bids sum to one dollar.