Question 1

What is the Weather Edge tool for prediction markets?

Accepted Answer

The Weather Edge tool compares National Weather Service (NWS) forecast highs against Kalshi temperature market prices across 8 US cities. A normal distribution model estimates the probability that the actual high will be above or below a given strike, then compares that to the Kalshi price. When the model disagrees with the market by 5+ percentage points, there is a quantifiable edge.

Question 2

How does the Weather Edge tool calculate temperature market edge?

Accepted Answer

The tool fetches the NWS forecast high for each city, then uses a city-specific normal distribution (calibrated to historical forecast error) to compute the probability of exceeding or falling below the Kalshi contract strike. The difference between that model probability and the Kalshi price is the edge. Quarter-Kelly sizing and EV are computed and shown for the best play of the day.

Question 3

When should I trade on the Weather Edge signal?

Accepted Answer

Act on the signal when the edge is 5pp or greater, the market has meaningful volume (shown in the tool), and you have no strong reason to distrust the NWS forecast for that city and date. The signal updates daily at 6 AM ET. Use the quarter-Kelly fraction shown to size the position — never risk more than that percentage of your trading bankroll on a single weather play.