Weather Trading Guide
Trade temperature markets using NOAA forecast data
What Are Weather Markets?
Weather markets let you bet on measurable weather outcomes — typically the high temperature in a specific city on a specific date. Both Polymarket and Kalshi offer weather markets.
📊 Example Market
"Will NYC high temperature be above 35°F on February 10?"
If the official NOAA measurement shows 36°F or higher, YES wins. If 34°F or lower, NO wins.
Why Weather Markets Are Tradeable
Weather prediction is a science. The National Oceanic and Atmospheric Administration (NOAA) publishes forecasts that are remarkably accurate, especially for short-term predictions.
NOAA Forecast Accuracy
When markets misprice outcomes relative to NOAA forecasts, there's an opportunity.
The Strategy
- Check the NOAA forecast — Get the official prediction for the city and date.
- Compare to market price — If NOAA says 90% chance of 35°F+, but market prices YES at 70¢, that's potential value.
- Assess the edge — The gap between forecast probability and market price is your edge.
- Size your position — Larger edges deserve larger bets, but always manage risk.
Key Weather Markets
Most liquid weather markets. High volume, tight spreads.
Popular for winter temperature markets.
Interesting microclimate makes for varied markets.
Mountain weather creates volatility in forecasts.
Cross-Platform Weather Arbitrage
Sometimes Polymarket and Kalshi have the same weather market priced differently. When combined prices are less than $1, you can lock in guaranteed profit.
⚡ Arb Example
NYC High Temp above 40°F on Feb 15:
- Polymarket YES: 62¢
- Kalshi NO: 35¢
Total: 97¢ → Buy both for $97, receive $100 at resolution = $3 profit
Important Considerations
⚠️ Weather Trading Risks
- Forecasts can be wrong — Even NOAA misses. Weather is inherently uncertain.
- Edge cases — Markets often resolve to exact thresholds (e.g., exactly 35°F). Know the rules.
- Liquidity varies — Not all weather markets have good volume. Check before trading.
- Official measurement matters — Markets settle on NOAA official readings, not your local thermometer.
Resources
- weather.gov — Official NOAA forecasts
- NOAA Point Forecast — Detailed hourly forecasts
Get Weather Alerts
ArbAlert Pro includes weather market signals based on NOAA data.
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