Weather derivatives: Difference between revisions

From Glossary of Meteorology
No edit summary
m (Rewrite with Template:Term and clean up)
 
Line 1: Line 1:
 
{{Term
 
|Display title=weather derivatives
{{TermHeader}}
|Definitions={{Definition
{{TermSearch}}
|Num=1
 
|Meaning=Business contracts, established betwen two firms to provide financial coverage  for specific weather risks, that serve as a form of hedging against potential losses.
<div class="termentry">
|Explanation=The weather risk is the uncertainity in cash flow and earnings due to weather variability. Risks  typically covered for a firm in the energy industry are the number of heating or cooling [[degree-day|degree-  days]], and for agribusinesses, the amount of [[growing season]] rainfall or the number of July days  with temperatures above 32&#x000b0;C (90&#x000b0;F).
  <div class="term">
}}
== weather derivatives ==
}}
  </div>
 
<div class="definition"><div class="short_definition">Business contracts, established betwen two firms to provide financial coverage  for specific weather risks, that serve as a form of hedging against potential losses.</div><br/> <div class="paragraph">The weather risk is the uncertainity in cash flow and earnings due to weather variability. Risks  typically covered for a firm in the energy industry are the number of heating or cooling [[degree-day|degree-  days]], and for agribusinesses, the amount of [[growing season]] rainfall or the number of July days  with temperatures above 32&#x000b0;C (90&#x000b0;F).</div><br/> </div>
</div>
 
{{TermIndex}}
{{TermFooter}}
 
[[Category:Terms_W]]

Latest revision as of 01:32, 29 March 2024

Business contracts, established betwen two firms to provide financial coverage for specific weather risks, that serve as a form of hedging against potential losses.

The weather risk is the uncertainity in cash flow and earnings due to weather variability. Risks typically covered for a firm in the energy industry are the number of heating or cooling degree- days, and for agribusinesses, the amount of growing season rainfall or the number of July days with temperatures above 32°C (90°F).

The amount of precipitation of any type (including the liquid equivalent of frozen hydrometeors); usually taken as that amount measured by means of a rain gauge (thus a small, varying amount of direct condensation is included).

Retrieved from "https://glossary.ametsoc.org/w/index.php?title=Weather_derivatives&oldid=32336"
Powered by MediaWiki
Powered by WikiTeq
Powered by Semantic MediaWiki
Copyright 2024 American Meteorological Society (AMS). For permission to reuse any portion of this work, please contact permissions@ametsoc.org. Any use of material in this work that is determined to be “fair use” under Section 107 of the U.S. Copyright Act (17 U.S. Code § 107) or that satisfies the conditions specified in Section 108 of the U.S.Copyright Act (17 USC § 108) does not require AMS’s permission. Republication, systematic reproduction, posting in electronic form, such as on a website or in a searchable database, or other uses of this material, except as exempted by the above statement, require written permission or a license from AMS. Additional details are provided in the AMS Copyright Policy statement.