The use of the Black-Scholes Model in the Field of Weather Derivatives

The Black-Scholes model is a renowned pricing method for European options. Weather derivatives are a financial product at the convergence of the insurance and stock markets that are at the present of a high level of interest. This product can hedge and be a profitable investment at the same time, and can be used on its own or as part of a portfolio. In this paper we wish to analyze if and how the Black-Scholes model applies to Weather derivatives.