An Update on Weather Fear Premia Trades

In this article, we will review a class of trading strategies known as “weather fear premia” trades. We will describe them, arguing that they may comprise a type of risk premium and noting the ...

Author(s):

Hilary Till

Research Associate, EDHEC-Risk Institute
Principal, Premia Research LLC

In this article, we will review a class of trading strategies known as “weather fear premia” trades. We will describe them, arguing that they may comprise a type of risk premium and noting the extra diligence needed in their risk management. We note that both superior trade construction and an analysis of fundamentals are also critical for the successful implementation of these types of trades. We conclude with a cautionary note on a catastrophic trading blow-up that occurred in November 2018, illustrating the risk of such strategies.

Type: Working paper
Date: le 01/12/2018
Research Cluster : Finance

See Also

PUBLICATION
News
- 21-05-2019
The article titled “KIDZ Beating The Market? A Case For Children-Focused Thematic Index...
EDHEC organises the first business school hackathon at  VivaTech, and focuses it on career orientation for youngsters
News
- 21-05-2019
  EDHEC & Vivatech: a long-lasting partnership   In partnership with VivaTech since...
Want to be ahead of the pack on data analytics and visualisation?
News
- 20-05-2019
‘Data is the new oil’ is a sentence on everyone’s lips. The Economist even says that ''...
The EDHEC case study “Maison Maille” won the 2018 Emerald Best Case Award
News
- 17-05-2019
We are very proud to announce that “Maison Maille: making mustard aspirational to...