[ralph84]

If I was a NOAA meteorologist I'd be making bank insider trading temperature prediction markets.

[bee_rider]

Maybe this could be an alternative funding source for weather prediction, haha.

[rangestransform]

How can prediction markets be priced with continuous instead of discrete predictions?

[gzread]

They usually divide into buckets

[Esophagus4]

But wouldn’t that be a feature of the prediction market, not a bug?

If someone really smart knows what will happen, that will make the market’s predictive ability more accurate.

[gzread]

That's always been a just-so story invented to justify insider trading. If weather predictors always bet on a weather prediction market, why would anyone else? They'd be guaranteed to lose money.

[Esophagus4]

1) Not all expert weather predictors agree. They can bet against each other.

2) retail traders lose money and know far less than institutional investors, but do retail traders participate in the stock market? Of course they do.

[ralph84]

The meteorologist making the observation has the ability to sway the outcome. "Those automated observations were wrong, turns out the maximum temperature today was 61F not 60F." This already happens all the time. Whether insiders are doing this to win in prediction markets is up for debate.