Traditional Culture Encyclopedia - Weather inquiry - What are weather futures? Please explain, thank you

What are weather futures? Please explain, thank you

The trading principles of weather futures are essentially the same as those of other futures. At the beginning of each month, the futures market authorities will determine an initial value for the number of cooling days or warming days based on the temperature of the month in the past 10 years, such as 40 degrees (Fahrenheit). To get the market going, a designated "market maker" will then call out a "bid" and "ask," with the former slightly lower and the latter slightly higher than the initial value, which is the degree by which investors can buy or sell.