Step one: Pick out a prediction market platform
The first thing you want to do is choose a prediction market platform that you’ll use to explore climate-related markets and prices, where you’ll presumably buy contracts.
Our top prediction markets for the climate and weather are:
Kalshi is the most suitable for retail (casual) traders who are U.S. citizens. The CFTC-regulated prediction market puts forth an app that is simple to use, with markets that are just as easy to read. An intuitive platform on desktop and mobile is essential for novice traders, whether you’re new to these types of climate markets specifically or prediction markets more broadly.
ForecastEx is an excellent choice for institutional and professional traders within the United States. A subsidiary of International Brokers that the CFTC also regulates, ForecastEx is legit and reliable, with large limits and enough liquidity to allow investors to take on significant positions in these niche markets, whether for hedging purposes or to express conviction in what one deems a profitable long-term proposition. ForecastEx has also proven to be forward-thinking by allowing traders to earn interest on their holdings, which certainly helps when it comes to long-term markets, some of which will not settle until 2035!
Polymarket is the most popular prediction market in the world, but it’s not currently available if you’re in the U.S. The decentralized, blockchain-based prediction market does not shy away from controversial markets, so it’s no surprise that they will let you bet on the number of “named hurricanes during Atlantic Hurricane season.”
Step two: Pick a market
The next thing you need to do is pick the market you want to bet on. Ideally, this is one that you believe you have an edge in. For example, you may live in Chicago and can use your proximity to the market to pinpoint the daily temperature quicker and more accurately than other traders.
Maybe you’re a climate scientist with expertise in Co2 emissions, and you might want to put your knowledge to use on ForecastEx.
Generally, it’s best to pick something you already know a lot about or a more volatile market with participants who know little. In other words, you want to select a market you can beat.
Prediction News Pro Tip: When there are identical or similar markets across platforms, you’ll want to pick your market first and then find the site with the best price for your position.
Step 3: Read the market resolution and rules
Whatever market you choose, you always want to read the resolution rules, including what source is used to determine the market’s outcome (in other words, the arbiter).
The resolution details provide more information about how the market is settled than you’ll find in the original questions posed, which are often short and ambiguous. It’s imperative to know what exactly you’re betting on, when and how the market will be settled, and what institution will verify the outcome.
