Comparative study on weather derivatives and conventional financial derivatives

Weather derivatives are conjunct product of avoidance of weather risks and financial tools innovation. As a kind of financial derivative products, weather derivatives possess comment features of general financial derivatives, such as product forms, trading models, hedging function, etc. While due to the difference of basic assets that construct the derivatives, there are significant deferent points between the two others: both the risks they transferred and the pricing models and methods are different. In addition, market participators and the roles they play are also different.