Interactive Brokers has launched a pilot program on its ForecastEx platform featuring hurricane-linked contracts. These financial instruments allow traders to hedge risks associated with specific coastal locations during Atlantic storms.
The contracts are tied to maximum wind gust speeds, with thresholds ranging from 70 mph to 200 mph in 10 mph increments. Trading for a specific location begins only when forecasts indicate a 5% probability of gusts exceeding 70 mph.
The pilot utilized Hurricane Isaias on October 7, 2026, to test the full lifecycle of listing, trading, and settlement. The firm used data from Reask, a catastrophe-modeling company, to determine forecast probabilities and post-storm wind reconstructions.
Unlike traditional hurricane metrics based on 1-minute sustained winds, these contracts settle based on 3-second gust maxima. The instruments are designed to resolve within days after a storm dissipates.
