{"id":257331,"date":"2026-09-24T13:15:00","date_gmt":"2026-09-24T17:15:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=257331"},"modified":"2026-09-24T13:27:00","modified_gmt":"2026-09-24T17:27:00","slug":"thursday-9-24-update-on-forecastex-prediction-markets-relevant-to-hurricane-polo-and-tropical-storm-nolo","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/thursday-9-24-update-on-forecastex-prediction-markets-relevant-to-hurricane-polo-and-tropical-storm-nolo\/","title":{"rendered":"Thursday 9\/24 Update on ForecastEx Prediction Markets Relevant to Hurricane Polo and Tropical Storm Nolo"},"content":{"rendered":"\n

The ForecastEx prediction market prices a major hurricane landfall in Mexico at 39% and in Hawaii at 4% as of the morning of 9\/24\/2026.<\/em><\/p>\n\n\n\n

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Image from squall.cloud<\/p>\n\n\n\n

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Hurricane Polo, about 195 miles west-southwest of Zihuatanejo, Mexico, in the eastern Pacific, intensified extremely rapidly from a tropical depression on Sunday to a Category 5 hurricane on Tuesday, with peak winds of 180 mph. As of this morning, it remains a Category 4 hurricane with 155 mph winds.<\/p>\n\n\n\n

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Tropical Storm Nolo, about 285 miles south of South Point, Hawaii, has sustained winds of 60 mph and is nearly stationary ahead of an anticipated northward turn. It is forecast to become a hurricane tonight and to reach major hurricane strength as it nears the Big Island on Saturday. A Hurricane Watch is in effect for the Big Island.<\/p>\n\n\n\n

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Both storms are relevant to ForecastEx’s Major Hurricane Landfall contracts, each of which poses the question “Will a major (Category 3+) hurricane make landfall in [Mexico or Hawaii] in 2026?”<\/p>\n\n\n\n

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A Yes pays if the eye crosses land in the region, or land within 50 miles of its border, while the storm is Category 3 or stronger. The hurricane page<\/a> includes live prices, National Hurricane Center tracks, cones, and wind probabilities for every listed region.<\/p>\n\n\n\n

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From the <\/em>live hurricane page<\/em><\/a>.<\/em><\/p>\n\n\n\n

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Polo and Mexico<\/strong><\/h2>\n\n\n\n

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The National Hurricane Center’s forecast steers Polo west for another day and a half, then north and northeast, and now has the center moving across Baja California Sur between Sunday and Monday. Intensity forecasts range from about 115 mph (Category 3) to 85 mph (Category 1). <\/p>\n\n\n\n

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From the <\/em>live hurricane page<\/em><\/a>.<\/em><\/p>\n\n\n\n

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The relevant question for the ForecastEx hurricane landfall contract is precisely what the intensity will be, given a likely landfall. <\/p>\n\n\n\n

According to the Google DeepMind<\/a> ensemble initialized at 06Z Thursday, about 35 of the 50 members make landfall on the Baja California peninsula between Sunday evening and Tuesday, mostly between Bah\u00eda Magdalena and Punta Abreojos. About 10 of the 50 members are Category 3 or stronger, and another 18 are near the Category 2\/Category 3 (major) boundary. <\/p>\n\n\n\n

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ForecastEx had the major hurricane landfall contract for Mexico at 39%<\/a> on Thursday morning (Yes bid 36\u00a2, No bid 58\u00a2).<\/p>\n\n\n\n

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From Weathernerds.<\/em><\/p>\n\n\n\n

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Tropical Storm Nolo and Hawaii<\/strong><\/h2>\n\n\n\n

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Another storm threatening land is Tropical Storm Nolo, currently south of Hawaii’s Big Island. The National Hurricane Center forecast shows Nolo moving north today and then sharply west this weekend, passing about 75 miles south of South Point early Saturday with 115 mph winds (Category 3). The forecast keeps the center offshore, but the track is more uncertain than usual with run-to-run inconsistencies.\u00a0<\/p>\n\n\n\n

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The National Hurricane Center has the highest risk of hurricane-force (Category 1+) winds over land at South Point, Hawaii, at 33% (though that could occur without landfall). <\/p>\n\n\n\n

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<\/em> From the <\/em>live hurricane page<\/em><\/a>.<\/em><\/p>\n\n\n\n

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The contracts that speak most directly to Nolo\u2019s impacts on Hawaii are ForecastEx’s Live Hurricane contracts<\/a>, which ask questions of the form, “Will Hurricane Nolo cause wind gusts of 70 mph or greater in Hilo, HI?” (repeating the question in 10 mph steps up to 200 mph). <\/p>\n\n\n\n

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They settle within days of the storm’s end, based on the peak three-second gust that the tropical cyclone risk analytics firm Reask<\/a> calculates over the land within 10 km of each location. They are listed once the forecast probability of a 70 mph gust at a location reaches about 5%. <\/p>\n\n\n\n

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Hilo is the one location in play so far for these contracts. Reask\u2019s LiveCyc system issued for 06Z Thursday gives Hilo a 15% chance of a gust of 70 mph or more from Nolo. <\/p>\n\n\n\n

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This indicates a glancing blow in terms of winds (Nolo is expected to bring extensive rainfall to the Big Island regardless), but the Google DeepMind ensemble leaves open the possibility that the storm could still drift further north than the official track forecasts and shows several members that bring the eye very close to land. <\/p>\n\n\n\n

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From Weathernerds.<\/em><\/p>\n\n\n\n

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The broader major hurricane landfall contract for Hawaii<\/a>, which requires the eye to cross an island at Category 3 or stronger, is at 4%, consistent with a forecast track that passes south of the Big Island.<\/p>\n\n\n\n

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Prediction markets on weather and climate outcomes can improve forecast accuracy<\/a> and provide a way to hedge against negative outcomes.<\/p>\n\n\n\n

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Further Reading on the Risk Hedging and Risk Transfer Applications of Hurricane Forecast Contracts<\/strong><\/h2>\n\n\n\n

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