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Quantitative Finance · Glossary

What is Weather-driven position?

Definition 23.2 Strategies II: Volatility, Relative Value, Macro and the Bank Desks · Chapter 23 — Power and Gas Trading

A weather-driven position is a position in power or gas taken on a forecast of weather (temperature, wind, cloud, precipitation) that differs from the one in the market’s prices, closed when the forecasts converge or the weather arrives.

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