How Weather Prediction Markets Work
A beginner-friendly guide to forecasts, market prices, and settlement rules.
What is a weather prediction market?
A prediction market is a place where you can trade shares in the outcomes of future events. For weather markets, participants trade based on their expectations of future weather events.
Each contract pays out exactly $1.00 if the outcome happens, and resolves to $0.00 if it does not.
What does a price like 32¢ mean?
The price of a contract is determined by what other traders are currently willing to buy or sell it for. Because a contract resolves to either $1.00 (Yes) or $0.00 (No), the current market price represents the market's collective expectation—or implied probability—of that outcome occurring.
Why official weather stations matter
A prediction market resolves using a specific settlement weather station, whereas your phone app shows coordinates compiled from grid interpolation.
If the market rules specify that settlement is decided by KNYC (Central Park), then even if your app or the airport recorded 87°F, only the Central Park sensor determines the contract winner. Weather app forecasts can disagree with station readings by several degrees.
What we do NOT do
- We do not support trading: There are no wallet connections, buy/sell buttons, or deposit options.
- We do not offer trading advice: All information represents statistical research comparing forecast center points against market averages.
- We do not promise guaranteed edge: We write forecasts as approximations. The market often contains information not reflected in weather models (such as local wind patterns).
How Signal Performance is tracked
To maintain transparency, we save an immutable copy of every generated prediction snapshot before the forecast date ends.
Once the calendar day ends and the weather station publishes its daily summary archives, the results are compared. Wins, losses, and calibration percentages are saved. We never edit past signals retroactively.