The clearest change is a San Francisco rotation: exit the 72–73°F position, whose edge has disappeared, and move a smaller amount into 70–71°F. Chicago and Seattle remain the strongest contracts already held, but their positions are large enough.
This remains a paper portfolio; no live orders were placed.
Recommended actions
| Contract | Executable price | Fair estimate | Edge | Action |
|---|---|---|---|---|
| San Francisco 72–73°F YES | sell around 0.27 | 24–26% | negative | Sell all |
| San Francisco 70–71°F YES | buy ≤0.35 | 44% | +9 pp | Add 10 USDT |
| Chicago 86–87°F YES | buy 0.30 | 46% | +16 pp | Hold existing 50 USDT |
| Seattle 82–83°F YES | buy 0.31 | 44% | +13 pp | Hold existing 25 USDT |
| NYC 82–83°F YES | buy 0.36 | 43% | +7 pp | Hold existing 25 USDT |
| Dallas July 19, 98–99°F YES | buy 0.49 | ≈58% | +9 pp | Hold existing 50 USDT |
| No US–Iran talks by August 31 | buy NO 0.55 | ≈63% | +8 pp | Hold existing 80 USDT |
| WTI touches $90 in July | buy 0.519 | ≈56% | +4 pp | Hold existing 75 USDT |
| Fed raises 25 bps in July | buy 0.05 | 6–7% | small | Hold 10-USDT tail only |
Portfolio change: San Francisco
The latest airport forecast peaks at 71°F, directly supporting 70–71°F. Polymarket asks 35¢ for that range, while 72–73°F costs 29¢ and can effectively be sold near 27¢.
Recommended execution:
- sell the entire 72–73°F position at 0.27 or better;
- expected proceeds from the model’s approximately 66.7 shares: about 18 USDT;
- estimated realized loss: about 2 USDT;
- buy another 10 USDT of 70–71°F at no more than 0.35;
- total 70–71°F cost becomes 25 USDT.
At a 44% fair probability, the enlarged 70–71°F position has approximately +5.4 USDT model EV. Do not automatically move the entire sale proceeds into it—the San Francisco forecast still has meaningful one-degree uncertainty.
Strongest held positions
Chicago 86–87°F
The executable YES price remains 30¢, while the hourly airport forecast reaches 86°F. Polymarket resolves using the whole-degree maximum recorded at KORD, so 86°F and 87°F both win this contract.
My fair estimate is approximately 46%, implying about a 16-percentage-point advantage and roughly 53% expected return at a fresh 30¢ entry. Nevertheless, the current 50-USDT position already equals the maximum sensible allocation for a narrow weather range. Hold without adding.
Seattle 82–83°F
The KSEA forecast peaks at 83°F, while 82–83°F is available at 31¢. The neighbouring 84–85°F range remains the market favourite at 34–35¢.
Fair probability is approximately 44%. The existing 25-USDT position remains attractive, but reported volume for the outcome is only about $628. Hold and avoid increasing the position through the thin order book.
NYC 82–83°F
LaGuardia’s forecast peaks at 82°F, but the contract has repriced upward to a 36¢ ask from roughly 32¢ earlier. Its advantage has therefore narrowed materially.
Fair probability is approximately 43%. Hold the existing 25 USDT, but do not add unless the price returns to 0.33 or lower.
Dallas
Dallas Love Field is currently around 97°F, with a forecast high of 98°F. The July 19 contract now prices 98–99°F at 47%, with an executable ask near 49¢.
The position still has positive expectation, but no additional purchase is recommended. This is now a live weather event, and delayed station data could omit a previously recorded higher reading. Hold the existing 50-USDT position through resolution unless a bid above approximately 0.62 becomes available.
For July 20, 100–101°F costs 49¢ and the forecast high is 101°F. Once ordinary forecast error is included, fair probability is approximately equal to the price, so there is no trade.
Macro positions
No new US–Iran talks by August 31
NO costs 55¢, compared with 46¢ for YES. The latest escalation includes an eighth consecutive night of US strikes, additional Iranian attacks in the Gulf, and the breakdown of the previous ceasefire arrangement.
Fair NO is approximately 63%. The contract requires a new formal senior-level, in-person negotiating round; technical follow-up meetings alone do not qualify. However, indirect diplomacy through mediators can count, preventing a higher confidence estimate.
Hold 80 USDT without adding because this position is positively correlated with WTI.
WTI touches $90
The contract trades at 51.9¢. CME reported WTI at $81.77 on Friday, July 17, up 4.46% for the session. The Polymarket contract wins if any eligible one-minute active-month candle touches $90 during July.
Renewed hostilities have slowed tanker traffic even though July Gulf exports initially increased, supporting a fair estimate near 56%.
Hold 75 USDT. The approximate four-point edge is insufficient for further correlated exposure.
Fed raises 25 basis points
A July increase costs 5¢, while no change is priced at 94%. The official FOMC meeting is scheduled for July 28–29.
Fair probability is only around 6–7%. Keep the reduced 10-USDT tail position, but do not restore the previous 40-USDT allocation.
Updated model portfolio
Assuming the San Francisco rotation executes:
| Open position | Cost basis |
|---|---|
| Dallas July 19, 98–99°F YES | 50 USDT |
| Chicago July 20, 86–87°F YES | 50 USDT |
| Seattle July 20, 82–83°F YES | 25 USDT |
| NYC July 20, 82–83°F YES | 25 USDT |
| San Francisco July 20, 70–71°F YES | 25 USDT |
| WTI touches $90 in July YES | 75 USDT |
| No US–Iran talks by August 31 | 80 USDT |
| Fed raises 25 bps in July | 10 USDT |
| Total open cost | 340 USDT |
| Portfolio metric | Estimate |
|---|---|
| Starting capital | 1,000 USDT |
| Free reserve | approximately 647–650 USDT |
| Cumulative realized P/L | approximately −10 to −13 USDT |
| Bid-side liquidation value | approximately 988–991 USDT |
| Weather exposure | 175 USDT |
| Maximum nominal open-position loss | 340 USDT |
| Raw model expected terminal value | approximately 1,080–1,085 USDT |
| Raw expected return | approximately +8.0% to +8.5% |
| Expected value after a 60% haircut to estimated edges | approximately 1,025–1,030 USDT |
The difference between liquidation value and expected terminal value is primarily caused by wide weather-market spreads and by holding contracts whose model probabilities exceed their current bids.
Key risks
The main risk remains exact station-level temperature resolution: a one-degree error can make several weather positions lose despite broadly correct forecasts. Wunderground revisions can also affect settlement until the next day’s first data point is published. Chicago, Seattle, and NYC therefore should not be enlarged further.
WTI and Iran NO could decline together following credible diplomatic progress. The Fed tail will probably expire worthless. Use limit orders only, particularly for Seattle, NYC, and San Francisco.
Net change: exit San Francisco 72–73°F, add 10 USDT to San Francisco 70–71°F, and leave every other position unchanged.
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