Climate change and weather variations can cause literally billions of dollars of financial risk. This can impact every industry from agriculture and commodity trading to recreation and travel. There is a need for an alternative product, which can help to offset that risk. Sure there is flood, hail and many other types of insurance products. But there is a growing need for something else—Weather Derivatives.
Weather Derivatives that are typically purchased come in the form of Call and Put Options, using weather indices as the underlying asset rather than the value of a typical asset (stock, commodity, etc.). For a premium, and up to a limit (maximum payout or cap), the weather derivative pays per index point away from the strike. Here are a few examples:
See this quote by Rebecca Leonard, a Partner at Weather Risk Global: “There is a clear link between the transpiring weather markets and the solutions to the problems created by climate-based natural disasters. If we subdivide and overlap weather risk markets, there are numerous opportunities for risk to be amassed and shared globally. Adverse weather events slow economic growth, especially in economies driven primarily by agriculture. In many cases, catastrophes can negatively affect the real GDP growth of entire nations for years. Weather derivatives can provide financial protection at the critical juncture when weather events strike, before famine and crop devastation have taken hold (Filho, 2013). Weather Risk Markets are among the most innovative tools for transferring risk.”
To see a full article click here http://meteorology-news.com/tabs/blog/preview/2017/7/weather-derivatives-and-the-ability-to-hedge-risk-in-unwanted-weather-events
Climate Change and Weather Derivatives
In addition, climate change may be one of the greatest threats of our time. But it also presents potential great opportunities. Businesses, farmers, tech firms and shipping companies can capitalize on climate change by investing in weather derivatives. We here at BestWeather, Inc. are formulating a working relationship with WeatherRisk Global.
Farmers in developing and third world countries have a need to hedge weather risk. Also, the average investor who is looking for an exciting, alternative way to potentially capitalize on the whims of weather, WeatherRisk Global’s Weather Derivative Fund WEATHER LOGIX is something you should consider.
They have posted some extraordinary trading returns. While past performance is not indicative of future results, I suggest you contact me at subscriptionsbestweather@gmail.com and I can provide you with much more detail.
