Each contract is referenced to one of 18 US cities. One HDD or CDD is worth $20. An HDD is 65 degrees F minus a given day's average temperature. A CDD is the day's average temperature minus 65 degrees.
Daily Examples:
1) A day in Kansas City having 14 HDDs is $100 colder" (per contract) than a day with 9 HDDs.
2) If a day in Tuscon averages 90 degrees F then there were 25 CDDs recorded. That day would be "$400 hotter" than a 70 degree F day with only five CDDs.
Monthly Examples:
(Each CME degree day futures contract is based on a specific calendar month, or series of months, and is financially settled according to the cumulative tally of the daily HDDs, or CDDs,
