$20 a Day Against Rain: This Ice Cream Shop Covers 43% of Its Rent Thanks to Kalshi

Twenty dollars a day bet against nice weather. In Los Angeles, Jason Jiang, 37, co-manager of the ice cream shop 28wishes in the heart of downtown, earns up to $1,500 a month on Kalshi by betting on California's cold snaps. This amounts to 43% of the $3,500 monthly rent for his shop, paid through weather contracts.

A former banker turned ice cream maker who hedges against rain: the strategy is no whim. For $600 a month, it replicates what electricity companies have been doing for nearly thirty years in the weather derivatives market.

Key Points

• Jason Jiang, co-manager of the ice cream shop 28wishes in Los Angeles, bets $20 a day on Kalshi's weather markets and earns up to $1,500 a month, covering 43% of his rent.
• His shop loses nearly 20% of revenue below 21 °C (70 °F): binary contracts based on NOAA readings compensate for these slow days.
• CME's weather derivatives, reserved for energy companies and large industries, have never been accessible to a business paying $3,500 in rent.
• Kalshi, valued at $22 billion, faces competition from Arizona and Ohio while the CFTC wraps up a consultation assessing the utility of hedging contracts.

Twenty Dollars a Day Against Days Without Customers

The shop collects five-star reviews for its homemade ice creams, but its business hinges on one figure: below 70 degrees Fahrenheit, around 21 °C, it loses nearly 20% of its revenue. Jason Jiang spent years in corporate banking before serving ice cream, and he tackled the issue like a banker.

<< Ice cream is one of the most weather-dependent products in the world. We lose about 20% of revenue when the temperature drops below 70 degrees. So we essentially cover this profit loss through the app. >>

Jason Jiang, co-manager of the ice cream shop 28wishes in Los Angeles

With his younger brother James, co-owner of the shop, he started in the spring by betting $20 a day on Kalshi's climate markets. $600 committed each month, for gains that rise to $1,500. The two brothers rely on weather forecasts, specialized websites, and scientists followed on social media. Jason Jiang finds their predictions "frighteningly accurate" and embraces the spending line: "it's a risk we are willing to take."

His wife, however, was initially skeptical. "She said to me: 'Are you sure? Is this a good idea?' Eyebrows were definitely raised. But when I showed her that we could win up to $800 in a single day with a weather forecast, it's hard to argue against that." Brothers Jason and James Jiang cover nearly half of their monthly rent by betting on climate fluctuations -- Source

Weather Hedging, Long Reserved for Electricians

Covering oneself in finance means taking a position that pays off precisely when the activity loses money. Weather derivatives have existed since the late 1990s, and the CME Group offers a comprehensive range: contracts on heating degree days (HDD) and cooling degree days (CDD), which measure the daily deviation from a reference temperature, along with contracts on cumulative average temperatures. Each unit is worth 20 dollars per index point and is primarily traded in blocks via ClearPort, the group's over-the-counter clearing service, facing speculative funds and insurers.

Typical clientele includes energy companies, agricultural groups, breweries, and amusement parks. An independent ice cream shop with a rent of 3,500 dollars has never crossed this threshold due to unsuitable contract sizes and the lack of a professional brokerage account.

Kalshi has eliminated the entry ticket. Its weather markets operate on binary contracts, in 2 °F increments on the day's maximum in a given city, with variations for rain, snow, and hurricanes. The contract pays 1 dollar if the event occurs, zero otherwise, and settlement relies on official readings from NOAA, the U.S. federal weather agency, and the National Weather Service. Thus, a position bought at 4 cents yields 25 times the stake. No minimum deposit is required, and no broker needs to be approached. This absence of a threshold has raised concerns from the American Farm Bureau Federation, which pointed out the massive influx of speculators into the agricultural contracts listed on the platform.

Kalshi is valued at 22 billion dollars and faces opposition from the states.

Launched in 2021 by two former MIT students, Tarek Mansour and Luana Lopes Lara, the platform claims over 5 million monthly active users. In March, it processed 13.1 billion dollars in volume out of 25.7 billion across all predictive markets, ahead of the 10.6 billion from Polymarket, its on-chain competitor that settles its positions in USDC. In June, its volume surpassed 20 billion, including about 7 billion on the perpetual crypto futures launched at the end of May on bitcoin, ether, XRP, and Solana. These perpetual futures are the first allowed by the CFTC, the federal regulator of U.S. derivatives markets. A Series F round of 1 billion dollars led by Coatue valued the company at 22 billion.

Local regulators, however, are not backing down. In Arizona, Attorney General Kris Mayes filed twenty criminal charges against Kalshi, before a federal judge temporarily prohibited the state from enforcing its gambling laws and suspended the proceedings. The Ohio Casino Control Commission is demanding 5 million dollars in fines. The CFTC retaliated by suing Arizona, Connecticut, and Illinois, arguing that these contracts fall under federal derivatives law, just like a farmer's hedge on his crops.

The U.S. regulator published a draft of rules on June 10, with public consultation closing on July 27. Among the criteria considered for authorizing a contract: its hedging utility, its ability to provide businesses with finer protection than existing instruments, and the risk of pushing volumes to less regulated offshore platforms. The former financier embraces the irony of a rainy day fund: << But even in banking, you know, everything is a bet. Even in life. You have to do your own thing to be happy. >>

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