Weather Derivative
Weather derivatives are financial instruments that can be used by organizations or individuals as part of a risk management strategy to reduce risk associated with adverse or unexpected weather conditions. The difference from other derivatives is that the underlying asset (rain/temperature/snow) has no direct value to price the weather derivative. See Exotic derivatives.
Read more about Weather Derivative: Overview of Uses, History, Valuation, Further Reading
Famous quotes containing the words weather and/or derivative:
“Every incident connected with the breaking up of the rivers and ponds and the settling of the weather is particularly interesting to us who live in a climate of so great extremes. When the warmer days come, they who dwell near the river hear the ice crack at night with a startling whoop as loud as artillery, as if its icy fetters were rent from end to end, and within a few days see it rapidly going out. So the alligator comes out of the mud with quakings of the earth.”
—Henry David Thoreau (1817–1862)
“Poor John Field!—I trust he does not read this, unless he will improve by it,—thinking to live by some derivative old-country mode in this primitive new country.... With his horizon all his own, yet he a poor man, born to be poor, with his inherited Irish poverty or poor life, his Adam’s grandmother and boggy ways, not to rise in this world, he nor his posterity, till their wading webbed bog-trotting feet get talaria to their heels.”
—Henry David Thoreau (1817–1862)