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Trade of the Week: Wet bets pay off in UK downpours

A niche market for weather derivatives may now be offering hedgers and speculators some protection from the relentless downpours in the UK

The UK has just endured its wettest June on record, and July has so far offered little respite. But a niche market for weather derivatives may now be offering some protection from the relentless downpours.

UK firms that took out protection - through weather derivatives traded on the CME Group - against the rain and unseasonable temperatures early enough, could have protected themselves against a hit to revenues or a rise in costs.

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