Kalshi partners with Weather Company for hedge settlements
Prediction market Kalshi has announced a strategic partnership with The Weather Company to expand its weather hedge settlement capabilities. The agreement will see Kalshi use The Weather Company’s enterprise-grade weather data feeds as its trusted source for verifying weather hedging settlements.
While at the same time, The Weather Company will incorporate Kalshi’s real-time probability data within select experiences on its flagship app and website. This integration reportedly gives consumers new ways to understand how markets are pricing weather risks.
Managing risk in a changing climate requires essential, scientifically-supported data. Kalshi’s weather and climate markets allow traders to stay updated on shifting weather and forecast predictions for everything from temperature, precipitation and other measurable conditions, which vary by market and location.
Interest in weather risk remains high, with 89% of U.S. adults reportedly saying that weather impacts how they plan their day-to-day tasks. The total volume for the prediction market platform’s climate and weather vertical alone has grown by 500% year over year and is pacing toward $1.1 billion in annualised volume.
Will Brackett, head of partnerships at Kalshi, added: “Weather is one of the fastest-growing and most key categories at Kalshi because it affects everyone – from individuals and businesses to governments. As prediction markets become a more valuable tool for understanding uncertainty, they offer a new lens to complement the trusted forecasting and expertise The Weather Company delivers every day. We’re proud to partner with the world’s most respected brand in weather to help people make sense of the world around them.”
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Dr. James Belanger, vice president of meteorology at The Weather Company, commented: “When weather data is used to verify outcomes in real time, accuracy and trust matter. Our priority is ensuring Kalshi’s settlements rest on objective, scientifically validated atmospheric data. Every value we deliver carries a documented method reviewed by our meteorologists and held to the same standard, whether it comes from one official station or is derived from several observation sources.”
Weather hedging as an industry has been around since the 1990’s, with weather derivatives, futures and options traded on exchanges and over the counter. With severe weather events becoming more disruptive and increasing in frequency, managing weather-related risk and building resilience is becoming even more important.
Kalshi designs the contracts, operates the exchange, and resolves markets under its regulatory framework. The Weather Company provides the authoritative observation data used to settle these markets with a consistent, documented methodology for each market type. In addition to providing data for market settlement and content integration, the companies will also collaborate to explore creating new weather markets that touch climate, sports, culture and more.
Businesses are utilizing the platform to hedge on weather events, ranging from ice cream shops managing unseasonably cool summers to logistics firms managing precipitation impacts. Parametric protection is a key feature, as Kalshi’s weather contracts are settled on actual weather data rather than losses. Third-party data and indices are critical to the triggers of these risk transfer arrangements.
Kalshi noted that the partnership is anticipated to deliver essential, scientifically-supported data to effectively manage changing conditions and facilitate informed, confident decision-making.
