About Weather Derivatives
Weather derivatives are financial options. The purpose of weather derivatives is to allow businesses and other organisations to insure themselves against fluctuations in weather. The payout of weather derivatives is based on a weather index which is derived from measurements of an official weather station. The buyer of a weather derivative can gain an amount as high as the contractual maximum payout, with the loss limited to the full premium amount.
Please find below links to independent sources describing weather derivatives:http://en.wikipedia.org/wiki/Weather_derivativehttp://www.investopedia.com/articles/optioninvestor/05/052505.aspMore information can be found under
About/Resources.