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US Average January Temp Likely to Exceed 29 Degrees: Feb. 3, 2025

US Average January Temp Likely to Exceed 29 Degrees: Feb. 3, 2025

Posted February 3, 2025 at 11:27 am

Jose Torres
IBKR Macroeconomics

Forecast Trader participants point to a 58% chance that the US’s average temperature for last month will exceed 29 degrees Fahrenheit. This 29-degree threshold is likely to be surpassed, however, based on a review of historical data.

Forecast Contract asking is average US temperature will exceed 29 degrees Fahrenheit in January.

Source: ForecastEx

First, the average January temperature during the past 10 years has been 33.2 degrees. The average temp for last month, therefore, would have to be 4.2 degrees below the 10-year average or more for the Yes side to lose. And when widening the timeframe of historical analysis, the 30- and 100-year averages are 32.7 and 30.6 degrees. Additionally, the last time the average January temperature didn’t exceed 29 degrees was 1988, illustrating how rare it is to have temperatures below that level.

The average US temperature for January hasn't been below 29 since 1988.

I believe that the aforementioned contract is priced inexpensively considering the odds, and it offers an opportunity for existing and new IBKR ForecastTraders to engage in our climate instruments. The outcome will be known next Monday the 10th when the National Oceanic and Atmospheric Administration releases the figure. The Yes, at $0.58, delivers a dollar if correct.

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Displayed outcome information is based on current market sentiment from ForecastEx LLC, an affiliate of IB LLC. Current market sentiment for contracts may be viewed at ForecastEx at https://forecasttrader.interactivebrokers.com/en/home.php. Note: Real-time market sentiment updates are only active during exchange open trading hours. Updates to current market sentiment for overnight activity will be reflected at the open on the next trading day. This information is not intended by IBKR as an opinion or likelihood of a potential outcome.

Disclosure: CFTC Regulation 1.71

This is commentary on economic, political and/or market conditions within the meaning of CFTC Regulation 1.71, and is not meant provide sufficient information upon which to base a decision to enter into a derivatives transaction.

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