Weather & Climate · Quantitative#180

Ensemble-Spread Probability Trading

Weather agencies do not run one forecast — they run dozens of slightly perturbed versions, called an ensemble, and the spread between those members is itself the honest measure of uncertainty. Counting the fraction of members that clear a threshold gives you a directly tradeable probability. Markets quoted off a single headline forecast number ignore that distribution entirely, which is exactly where the mispricing sits.

What you need to run it

Access to full ensemble member output (GEFS, ECMWF ENS) rather than just the deterministic run
Threshold-crossing counter that converts member outcomes into a probability
Bias correction per station, since raw model output is systematically off at some sites

Where this applies

Markets on Polymarket where ensemble-spread probability trading is the natural play:

Will the high temperature in New York City exceed 95°F on August 15?
Will Chicago see more than 2 inches of rain this weekend?
Will Denver record measurable snow before November 1?

Capabilities this demands

Data ingestionModel / quantCustom code / API

At a glance

CategoryQuantitative

MarketWeather & Climate

Requirements3

CapabilitiesData ingestion, Model / quant, Custom code / API

VenuePolymarket (CLOB, Polygon)

Build it

Related weather & climate strategies

This is documentation, not advice. Poly Research & Robotics publishes how these strategies work because the method should be checkable — not as a recommendation to trade them. See the full strategy database (297 strategies) or the data resources directory.