> For the complete documentation index, see [llms.txt](https://climashield.gitbook.io/climashield/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://climashield.gitbook.io/climashield/weather-derivatives.md).

# Weather Derivatives

The most commonly used weather variable is a Temperature. As of now we are working on Temperature Derivatives. Contracts are formulated based on weather metrics such as Heating Degree Days(HDDs), Cooling Degree Days(CDDs) or Cumulative Average Temperature(CAT) over a specified duration. These metrics quantify the frequency of temperatures surpassing or dropping below a predetermined threshold throughout the contract period.