Let's Talk About The Weather

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This piece was written by Omar El Safy and edited by Pet Berisha.

Correction, 6 September 2026. This piece originally understated Polymarket International's weather. The error was in our own market set, not in the venue's data. We have re-derived every Polymarket figure from the chain, corrected the numbers and charts below, and rewritten the analysis that rested on them. Kalshi, ForecastEx and Polymarket US were re-checked against a second method and were correct.

On 27 August 2026, Kalshi signed The Weather Company to run quality checks on the station readings that its weather contracts settle on before a market resolves.

As we previously covered on Predicted, institutions have started to flirt with prediction markets, and weather is one of the markets they have their eyes on.

As recently as last month, Cantor opened block trading in Kalshi contracts to roughly 3,000 institutional clients. Those funds told the Wall Street Journal what they wanted, and one of those areas was weather.

Susquehanna's Joe Grubb has said the next area of material growth is large institutional risk transfer, tailored contracts for hedging bespoke industry risk that traditional insurance does not serve.

CME have been the place to trade weather since they listed weather futures in September 1999, and on 2 September 2026 alone $453M of notional volume went through their weather futures and options. Those contracts are built around a longer risk period, covering heating demand, cooling demand and seasonal temperature exposure.

Prediction-market weather is clustered at the other end, in one-day contracts on a single city's temperature.

Below is a look at the four prediction-market venues that trade weather.

A weather contract has two uses, as a forecast and as a hedge.

(1) As a forecast. Used by forecasting firms like WindBorne and Jua, who trade their own models to prove and monetise them.

A weather market gives more than a yes-or-no answer. Before settlement, its price offers a real-time estimate of the chance of an outcome.

A market trading at 70 cents on a Chicago temperature outcome means the outcome has roughly a 70% chance of happening.

For that signal to be useful, market prices need to be well calibrated. Outcomes priced at 70% should occur about 70% of the time.

Kalshi says its daily weather markets are 83.3% accurate one day before settlement, rising to 98.7% at close. Its Brier score fell from 0.115 to 0.010 across roughly 69,600 to 73,300 resolved markets at each horizon, per Kalshi Research.

The Brier score measures how close market probabilities came to the outcomes that occurred, where zero is perfect. These are Kalshi’s own figures and cover daily weather markets, not prediction markets broadly.

Calibration is what makes the hedge fair, because if contracts priced at 70% only landed half the time, hedgers would be overpaying for cover every time they bought it.

A well-calibrated market breaks even before costs and loses slowly after them, which is how insurance works. A forecasting firm uses the same number as the bar its own model has to beat.

(2) As a hedge. Bought by corporates and SMEs with weather-exposed revenue.

A business whose revenue moves with the weather buys a payout when the weather hurts it.

As we previously covered on Predicted, a Los Angeles ice cream shop uses $20-a-day contracts to cover part of its rent.

The hard part is basis risk. The contract pays out on a reading at a weather station, and the business loses money on the weather, and those two are not always the same.

The Jiangs (ice cream shop owners) lose about 20% of business when it drops below 70 degrees on their street in downtown LA, and the contract settles on the reading at LAX, 15 miles away.

Every city contract in this piece settles on a reading at one named weather station, usually an airport rather than the city centre.

And you cannot size a position until you know how much your revenue moves per degree. The Jiangs read meteorology feeds and follow climate scientists on social media to time their entries.

A hedge is a position you carry. On 2 September 2026, CME held 12.9x its daily volume in open positions, and Kalshi's biggest weather market holds 0.46x.

The CME figure is one measured day rather than a confirmed average.

Kalshi has been trading weather the longest, since June 2021. Polymarket International followed in March 2023, ForecastEx in August 2024, and Polymarket US in April 2026.

All-time totals to 24 August 2026.

The category traded $9.1M in 2022 and $7.7M in 2023. Then $121.1M in 2024, $523.0M in 2025 and $1,981.8M in the first eight months of 2026.

In 2024, Polymarket International's monthly global-temperature markets started trading, led by 2024 August hottest on record? at $3.6M. In November 2024, Kalshi added Denver, Philadelphia and Houston to a four-city list, and its year finished at $94.0M.

In 2025, ForecastEx arrived and listed daily high temperature markets in ten US cities in November, having sold nothing but monthly and annual global temperature contracts before. Kalshi's existing cities more than doubled, with Los Angeles going from 8.9M to 23.1M contracts. Polymarket International had a hurricane season worth $47.3M.

Almost all of the growth since has been in daily city temperature, where Polymarket International went from $88.3M in 2025 to $879.2M in the first eight months of 2026.

Kalshi had the category to itself for 21 months before Polymarket International listed, and 38 months before Polymarket US. ForecastEx took 31% of the market in its first quarter and was down to 7% by the middle of 2026.

Polymarket International moved ahead in November 2025 and has led 25 of the last 34 weeks. By 24 August 2026, it held 45.0% of the four-venue total, Kalshi 44.4%, ForecastEx 8.0% and Polymarket US 2.6%.

All four venues have only traded weather at the same time since 27 April 2026, which is 18 weeks to 24 August.

Kalshi opened the window at 30% and closed it at 44%. Polymarket International went from 62% down to 45%. Polymarket US peaked at 10% in May 2026 and is now 3%.

The combined weekly total stayed between $45M and $67M across all 18 weeks.

Daily city temperature has accounted for 99.8% of ForecastEx's all time weather activity, 94.1% of Polymarket US's, 89.4% of Kalshi's and 79.0% of Polymarket International's. All four venues sell the same product, and Polymarket International, the largest of them, is the only one not regulated by the CFTC.

A daily city temperature market settles in 24 hours, so the capital behind it comes back the next day. A seasonal contract holds that capital for months.

Polymarket International.

Polymarket International's biggest product is daily city temperature at 79.0%, then hurricanes at 12.9%. The monthly global temperature index is 2.8%, and annual climate markets are 2.4%.

Another 2.8% of that book is earthquakes, volcanoes and meteors, which are not weather at all.

Polymarket International traded $53.1M in the week ending 13 April 2026. Its biggest week was $54.8M on 16 March 2026, and it has run between $9.8M and $54.8M a week through 2026.

On 6 April 2026, the Météo-France station at Charles de Gaulle recorded a 4°C spike that no nearby station picked up, and another of 5°C on the 15th. Investigators suspect someone pointed a heat source at the sensor, such as a hairdryer. Traders positioned for the spikes made roughly $34,000, and Météo-France filed a criminal complaint.

Polymarket International has traded $1,225.1M of weather notional all-time, more than any other venue in this piece. The week of 13 April is 4.3% of it.

It lists far more cities than the US venues do, so its city book spreads wider. The five cities Polymarket US lists are 10.9% of it.

The three US venues sell close to the same thing, daily city temperature contracts.

Kalshi.

Kalshi has traded $1.06B of weather notional across 236 market series since June 2021, and says the category is growing 500% year on year. Our own analysis puts growth at +548% over the past four weeks compared to the same weeks a year earlier. At that pace, the next twelve months would run at $1.105B, more than the book has traded in its whole history.

Most of Kalshi’s weather trading is a next-day question about whether the highest temperature in a given city will fall within a specified range. Daily high-temperature contracts account for 81.6% of the total, or in volume terms $865.3M.

The products that most resemble traditional weather-risk instruments are close to absent, with monthly and seasonal temperature contracts at $6.1M, or 0.57% of the whole book, and hurricanes at 0.7%.

CME sells that longer risk period. Kalshi lists a similarly shaped contract across 11 cities, and it has traded $645,376 all-time.

CME moved $453M of weather notional on 2 September 2026 alone, so one day there is roughly 43% of everything Kalshi's weather markets have traded since June 2021.

Add the daily highs and lows together across 24 cities, and you get $948.0M, or 89% of everything Kalshi has traded in weather.

Los Angeles accounts for 18.3% and New York 17.4%, with Chicago, Miami and Austin behind them and a long tail after that.

Kalshi also lists daily temperature contracts for Paris, London, Amsterdam, Shanghai and Hong Kong, and all five have traded $0.

ForecastEx.

Daily city temperature is 99.8% of their weather book, the tightest of the three.

ForecastEx are owned by Interactive Brokers, and they are both a designated contract market and a clearing organisation, so they list and clear markets that other brokers route into rather than only serving their own customers.

It likely that Robinhood sends its weather flow there.

ForecastEx traded $37,085 of weather in 2024, its first year.

It reached 28.7% of everything the venue traded in 2025 and 54.8% in 2026. Its weather volume peaked at $73.1M in December 2025, its second month, and has run between $13M and $25M a month since.

Los Angeles alone is 30.9% of ForecastEx's weather volume, or $94.3M, across 41 listed cities.

Polymarket US.

Daily city temperature is 94.1% of its weather book.

Polymarket US lists five cities, highs only, with Miami and Los Angeles at the top, and first traded weather on 28 April 2026.

All four venues list the same five cities from 1 May to 31 August 2026, when all four books were live.

Over those four months, Kalshi traded $183.5M across them, more than three times any of the others. ForecastEx took $56.7M, Polymarket US $56.5M and Polymarket International $51.6M.

ForecastEx put 78.5% of its total into Los Angeles. Los Angeles was Kalshi's largest city too, at 42.1%, leaving 57.9% across the other four.

The two Polymarket books led on different cities. Miami was largest on Polymarket US at 27.7%, New York on Polymarket International at 37.1%.

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