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Strike Ladder

Trading Term

A strike ladder is a set of contracts on the same underlying variable listed at consecutive thresholds, so that prices across the whole set describe a probability distribution rather than a single central estimate. In daily temperature markets, for example, a ladder may span nine consecutive whole-degree strikes centered on the forecast high, with each price representing the probability of exceeding that value. The structure lets a participant read both where the market expects the variable to land and how much probability it assigns to the tails, and it lets a hedger buy protection specifically in the outcomes that would be most costly.

Energy expenditure implications of next-day temperature forecasts

Prediction markets might already be the best source for today’s weather forecast.

Fair Value Weather & Climate — Monday, August 3, 2026

Daily High Temperature Markets at ForecastEx

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