This prediction market concerns the number of major hurricanes (Category 3 or higher on the Saffir-Simpson scale) that will form in the Eastern Pacific basin between May 15, 2026 and December 1, 2026. The Eastern Pacific hurricane season officially runs from May 15 to November 30, with activity typically peaking in late summer. A major hurricane is defined by sustained winds of at least 111 mph (178 km/h). The market resolves to Yes if the count exceeds a specified threshold X, as confirmed by the National Weather Service or an equivalent national meteorological agency. Early closure applies if the event occurs before the season ends. The Eastern Pacific basin covers the ocean area from the west coast of Mexico and Central America out to about 140°W longitude. This region produces an average of 4-5 major hurricanes per year, though annual numbers vary widely. In 2023, the basin saw 6 major hurricanes, while 2024 had 3. The 2025 season, still in progress at this writing, will inform expectations for 2026. Forecasts from groups like NOAA's Climate Prediction Center and Colorado State University issue seasonal outlooks in May and August, based on factors such as sea surface temperatures, wind shear, and the El Niño-Southern Oscillation (ENSO) phase. Interest in this market stems from the direct impacts of major hurricanes on coastal populations, maritime shipping, and energy infrastructure. The Eastern Pacific's storms often affect Mexico's Pacific coast, the Baja California peninsula, and occasionally the southwestern United States. Hurricane Otis in 2023, which rapidly intensified to Category 5, caused an estimated $12-16 billion in damage in Acapulco, Mexico. Such events drive demand for accurate forecasting and risk assessment. The market allows participants to bet on aggregate seasonal activity, reflecting expectations shaped by climate models and historical data.

Historical Context

The Eastern Pacific hurricane season has been systematically recorded since the satellite era began in the 1970s. Before satellites, many storms went undetected. The modern record shows an average of 16-17 named storms per year, of which 8-9 become hurricanes, and 4-5 become major hurricanes. The most active season on record for major hurricanes was 1992, with 8 major hurricanes, driven by strong El Niño conditions. The least active was 2010, with only 1 major hurricane, during a La Niña year. Year-to-year variability is strongly linked to ENSO. El Niño years typically suppress wind shear over the Eastern Pacific, allowing more storms to form, while La Niña increases shear and reduces activity. However, the relationship is not perfect. In 2023, a strong El Niño contributed to 6 major hurricanes, but in 2015, another strong El Niño year, only 5 major hurricanes formed. Climate change is also affecting the basin. Sea surface temperatures have warmed by about 0.5-1.0°C since 1980, providing more energy for storms. Studies show that the proportion of hurricanes reaching Category 3 or higher has increased globally, though the total number of storms has not changed significantly. Major hurricanes in the Eastern Pacific have caused notable disasters. Hurricane Patricia in 2015 became the strongest Pacific hurricane on record with 215 mph winds, though it struck a sparsely populated area. Hurricane Otis in 2023 was a Category 5 that hit Acapulco directly, causing over 50 deaths and billions in damage. These events underscore the risk even in a basin that typically sees fewer landfalls than the Atlantic.

Frequently Asked Questions