Weather index calculated by subtracting a reference temperature (e.g. 50°F or 10°C) from the average daily temperature. Each degree of ‘warmth’ is a growing degree day (GDD). The deviations from reference temperature benchmark a biological process, such as insect development. ‘Warm’ temperatures necessitate the use of costly pesticides to protect crops against agricultural pests. The payout is the tick multiplied by the difference between the GDD level stated in the contract (i.e. the strike) and the cumulative GDDs for the contract period.