A Jul–Aug cooling-degree-day call, tested against burn history and an OU simulation.
Dallas summer CDD call · per-point payout
Inside the tool
What the underwriter actually works with.
A representative view of the Weather Pricing workspace for this scenario — coverage setup, the trigger ladder, and the priced result side by side. Figures are illustrative.
Contract
Station KDFW · Dallas-Fort Worth
Index
CDD base 65°F
Window
Jul 1 – Aug 31
Strike
1,380 CDD
Payoff
Call / point
Burn vs simulation
11-year history · OU Monte-Carlo
Run comparison
EL / point
$21.7
OU MC
Hit rate
38%
simulated
Mean CDD
1,357
Stress
±°F · ×vol
scenario
Risk to decision
How the deal comes together.
Problem
A Texas power retailer loses margin in a cool summer when demand falls. Before taking it to treasury, they need to know whether a Jul–Aug CDD call struck at 1,380 is actually near the money.
Structure
Station KDFW, accumulated CDD base 65°F, Jul 1–Aug 31. A call above 1,380 CDD pays a set amount per index point, with an optional cap on aggregate payout.
Evidence
11 years of calendar-correct burn (mean 1,357, σ 107) sit beside an OU Monte-Carlo run; burn implies an 18% hit rate, the simulation 38%, and the user can stress the seasonal mean and volatility.
Decision
The strike reads near the money before loads are applied and the deal is saved. Illustrative only.
See it on your own risk.
Enter the platform to structure and price this kind of deal end to end.