Cooling Degree Day - CDD

The number of degrees that a day's average temperature is above 65o Fahrenheit and people start to use air conditioning to cool their buildings. The price of weather derivatives trading in the summer are based on an index made up of monthly cooling degree day (CDD) values. The settlement price for a weather futures contract is calculated by summing a month's CDD values and multiplying by $20.

To calculate the CDD, take the average of a day's high and low and subtract 65. For example, if the day's average temperature is 80oF, its CDD is 15. If everyday in a 30 day month had an average temperature of 80oF, the month's CDD value would be 450 (15 x 30). The nominal settlement value for its month's weather derivative contract would therefore be $9,000 (450 x $20).


Investment dictionary. . 2012.

Look at other dictionaries:

  • cooling degree-day — a degree day above the standard temperature of 75°F (24°C), used in estimating the energy requirements for air conditioning and refrigeration. Cf. growing degree day, heating degree day. * * * …   Universalium

  • cooling degree-day — a degree day above the standard temperature of 75°F (24°C), used in estimating the energy requirements for air conditioning and refrigeration. Cf. growing degree day, heating degree day …   Useful english dictionary

  • Cooling Degree Day —   A value used to estimate interior air cooling requirements (load) calculated as the number of degrees per day (over a specified period) that the daily average temperature is above 65 degrees Fahrenheit (or some other, specified base… …   Energy terms

  • Cooling degree day —   A unit of measure that indicates how heavy the air conditioning needs are under certain weather conditions.   California Energy Comission. Dictionary of Energy Terms …   Energy terms

  • Degree Day —   A unit for measuring the extent that the outdoor daily average temperature (the mean of the maximum and minimum daily dry bulb temperatures) falls below (in the case of heating, see Heating Degree Day), or falls above (in the case of cooling,… …   Energy terms

  • degree-day —  ̷ ̷ˈ ̷ ̷| ̷ ̷ noun : a unit that represents one degree of declination from a given point (as 65°) in the mean outdoor temperature of one day and is often used in measuring fuel requirements of buildings * * * /di gree day /, n. Engin. one degree …   Useful english dictionary

  • degree-day — /di gree day /, n. Engin. one degree of departure, on a single day, of the daily mean temperature from a given standard temperature. Abbr.: dd Also, degree day. Cf. cooling degree day, growing degree day, heating degree day. [1925 1930] * * * …   Universalium

  • Degree day — A degree day is a measure of heating or cooling. Totalized degree days from an appropriate starting date are used to plan the planting of crops and management of pests and pest control timing. Weekly or monthly degree day figures may also be used …   Wikipedia

  • degree day — Term created to assess and acknowledge expected demand for energy. A degree day value is the difference between a day s average temperature and a previously set temperature ( in the U.S., 65 degrees Fahrenheit). Degree days above 65 degrees are… …   Financial and business terms

  • Degree-day —   A unit measuring the extent to which the outdoor mean (average of maximum and minimum) daily dry bulb temperature falls below (in the case of heating) or rises above (in the case of cooling) an assumed base. The base is normally taken as 65… …   Energy terms

  • degree day — noun a) A measure of heating or cooling, computed as the integral of a function of time that generally varies with temperature. b) A unit used in estimating the fuel consumption for a building; equal to the number of degrees that the mean… …   Wiktionary

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