盈透证券（Interactive Brokers）试推飓风风速预测合约，首测成交量有限，旨在切入天气风险对冲市场

Retail brokerage giant Interactive Brokers Group Inc. is looking to kick start a prediction market that will bring greater transparency to a hard-to-measure area of weather trading: hurricane risk.

When Category 2 storm Isaias tracked toward the Florida Panhandle last week, the US firm launched what it calls live hurricane contracts. They allowed traders to put money on whether Isaias’s wind gusts would top certain speeds at any of 25 different places, including Fort Walton Beach, Panama City Beach and Tallahassee.

The contracts are an attempt to harness the growing pool of retail investors in prediction markets for pricing risks from hurricanes, which are among the most costly weather disasters. While trading volume was modest on the Isaias contracts — IBKR’s first complete test run on an Atlantic storm — the longer-term goal is to provide the liquidity that would allow reinsurers and other institutions to better hedge hurricane risks.

It’s a first step in educating market participants about the potential for hurricane contracts to manage extreme-weather risks, said Patrick Brown, IBKR’s head of climate analytics, adding that the design incorporated feedback from reinsurers.

Weather prediction markets are booming as major platforms like Kalshi and Polymarket draw in millions of dollars in trading volume on temperature, rainfall and snowfall.

But most hurricane-related contracts currently target basin-wide storm counts and the number that make landfall, metrics that are too broad for pricing and hedging weather risks.

Brown and IBKR are trying to plug that gap by devising contracts focusing on the potential destructiveness of specific storms at particular locations. That’s designed to provide insurers, cities and utilities with a better hedge for the risks they face and the damage caused by hurricanes.

One potential application for the live hurricane contracts is using them to cover an insurance deductible, according to Brown and IBKR quantitative researcher Josh Hemmerling.

For example, a homeowner whose house is damaged by a hurricane may be on the hook for the first $20,000 of repair costs, and “a ladder of wind gust contracts can be used as a hedge against a deductible gap in an insurance policy,” they wrote in a recent note.

Read More: Kalshi Weather Odds Are Coming to a Weather App Near You

Still, it’s early days, and trading volumes on hurricane contracts will initially be just a tiny fraction of the damage wrought by destructive tropical cyclones like Isaias. Insured losses for the hurricane, the first to hit US shores in two years when it made landfall on Oct. 9, could total as much as $2 billion, according to Verisk.

Brown expects the hurricane contracts to attract more interest from institutional traders like reinsurers as volumes grow and they become more familiar with the products.

Similar efforts have had mixed success in the past. The Chicago Mercantile Exchange de-listed hurricane futures and options in 2014 due to limited trading. That lack of volume and liquidity has been a long-time challenge faced by the weather market, the size of which pales in comparison to the scale of economic impacts. Since 1980, tropical cyclones have caused $1.5 trillion of damage in the US alone.

Drawing in retail traders could be a key catalyst, according to some weather market veterans.

“Speculative capital is what the market is starved for,” said Steven Vu, a former weather derivatives trader and founder of weather derivatives trading platform WeatherMage. “Any product that can draw this to the market can have an immense impact on the price of risk mitigation.”