Betting on Winter

Some groups of people make a ton of money when a blizzard runs through town: your hot chocolate vendors, your sporting goods stores filled with sleds and skis; and – for four years now – futures traders.

Yes, folks - the Chicago Mercantile Exchange is letting you bet on snow.

Since 2006, if you’ve had an economic stake in how much of the white stuff hits the ground, you’ve been able to buy snowfall-futures contracts and hedge your bets. So if you’re a ice scraper manufacturer and you’re worried that it’s going to be a warm, dry December, you could buy into the market and cut your losses a little.

Futures contracts covering all kinds of weather are now more than a decade old, and companies whose business relies on one type of weather or another have been plundering meteorology talent everywhere, looking for the country’s best and brightest weatherpeople to determine their risk exposure, and invest accordingly. This increased scrutiny of what is usually considered the mandate of your local news is incentivizing hyper-accurate long-term forecasting on the part of corporations whose bottom lines depend, in one way or another, on snowfall.

Snowpusher can leverage this market to deliver price stability for its customers, which helps to reduce customer costs. These savings are particularly dramatic on multi-year contracts.