Weather index
A weather index is a standardized and continuous recording of weather values such as temperature , amount of precipitation , humidity , wind speed and similar weather values.
Weather indices often have a similar function to stock indices . For example, they provide the base value for such financial instruments as options and futures , which are traded in a standardized manner on stock exchanges such as the Chicago Mercantile Exchange (CME). The weather derivatives traded there , as these instruments are generally called, often relate to the values of a weather station . The CME offers contracts that have the average measured monthly weather indices from weather stations in Atlanta , Chicago , Cincinnati , Dallas , Des Moines , Las Vegas , New York , Philadelphia , Portland or Tucson as underlying values . On the European financial market, weather derivatives are traded on the Eurex in Zurich and on the LIFFE in London .