US Monthly Weather Cooling Degree Day (CDD)

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This product is geared to how much above 65 degrees Fahrenheit the temperature averages in a given city in a given month. It provides a way to:

• Protect revenues during times of depressed demand or excessive costs due to unexpected or unfavorable weather conditions in months when consumers may or are expected to use energy for cooling
• Accept the risk of unfavorable or atypical weather in exchange for possible profit

Learn How to Electronically Submit CME Group Weather Blocks at www.cmegroup.com/pivot

You can trade U.S. Monthly CDD futures on the following cities:

Things to know:

• You can trade contracts on 7 months: Apr, May, Jun, Jul, Aug, Sep and Oct
• Traded electronically on the CME Globex platform
  • Accessible around the clock, around the world
  • Complete price transparency and anonymity
• Each city has a distinct ticker code and trading symbol
• Block trading available
• CME Clearing clears and settles all trades and guarantees counterparty creditworthiness
  • Settlement is 2 business days following expiration
  • Cash-settled

About the Cooling Degree Day (CDD) Index

Degree days are measures of temperature deviations from 65° Fahrenheit.

A Cooling Degree Day value is a measure of how warm a day is in terms of how many degrees that day’s average temperature is above 65° Fahrenheit. The energy industry uses the Cooling Degree Day index to gauge how much energy customers are likely to use for cooling based on how warm it is in terms of CDDs for given months or a season.

For example, an average daily temperature of 80° would generate a CDD value of 15 (65 + 15 = 80). If the temperature were below 65°, the value of the CDD would be zero.

A monthly or seasonal CDD value is simply the sum of each daily CDD value recorded during a given month or season.

For example if there were 7 CDD daily values recorded in July in Chicago, the July CDD index would be the sum of the 7 daily values. Thus, if the CDD values were 25, 15, 20, 25, 18, 22 and 23 the July CDD index value would be148.

The value of a CDD futures contract is determined by multiplying the monthly CDD value by $20. Using the example above, the July CDD contract would settle at $2,960 ($20 x 148 = $2,960).