Daily Values are numbers that are created by comparing raw weather measurements to a reference value. Calculating Daily Values from weather data is the first step in determining the payout of a WeatherBill contract. For Basic Contracts, the Daily Values are just 1's and 0's, showing whether or not the weather measurement crossed the threshold. For Custom Contracts, the Daily Values can also show the amount by which the weather measurement crossed the threshold that was selected. Below are the different options you can choose for Daily Values and examples describing how they work:

Contract options for Daily Values:

Measurement above threshold: The Daily Value is the amount by which the weather measurement exceeds the threshold. If the weather measurement for a particular day is equal to or less than the threshold, the Daily Value for that day is 0. For example, if a contract has a threshold of 65° and the weather measurement is 72°, the Daily Value for that day would be 7, because the temperature was 7 degrees above the threshold. If a contract has a threshold of 65° and the weather measurement is 60°, the weather measurement would be 0.

Measurement below threshold: The Daily Value is the amount by which the weather measurement falls below the threshold. If the weather measurement for a particular day is equal to or less than the threshold, the Daily Value for that day is 0. For example, if a contract has a threshold of 45° and the temperature measurement was 33°, the Daily Value for that day would be 12 (not  -12!) because the temperature was 12 degrees below 45°. If a contract has a threshold of 45° and the weather measurement was 50°, the weather measurement would be 0.

1 if weather measurement above threshold, 0 if not: The Daily Value is 1 if the weather measurement is strictly above the reference point, and 0 otherwise. This choice of Daily Value is used for counting the number of days that the weather measurement is above the Daily Value Threshold. For example, if you have a "rainy days" contract that pays for days with more than .1 inches of precipitation, the Daily Values for days with more than .1 inches of precipitation will be 1's, and the Daily Values for days with fewer than .1 inches will be 0's. At the end of the contract, we add up the number of 1's to see how many rainy days there were.

1 if weather measurement is at or below threshold, 0 if not : The Daily Value is 1 if the weather measurement is at or below the threshold, and 0 otherwise. This choice of Daily Value is used for counting the number of days that the weather measurement is below the Daily Value Threshold. For example, counting days where the minimum temperature is less than 32°, or days where there is no precipitation.

To help determine the best choice for the Daily Value in a contract, you may want to consider the following question: Does your business get hurt more severely as the weather gets worse? If so, the first two choices would be good. If your business is hurt once the weather crosses a certain point but is not affected more severely as the weather gets worse, then the last two types of Daily Values may be best for you.

Examples:

Here are two examples to illustrate the differences between choices of Daily Values.

Golf Course:
If there is any rain beyond a light mist, be it a drizzle or a downpour, no one wants to play golf. A golf course would want to buy a contract that pays a fixed amount for each day with more than a mist of rain (The third choice on this page).

Mall:
Think about a large indoor mall. In the summer, the mall has to use air conditioning to keep its customers cool. The amount of money the mall spends on cooling each day depends on how hot it is outside - it costs more to cool the mall on a 90° day than on a 75° day. The mall would want a contract that pays out per degree past a certain temperature threshold (the first choice on this page).