Will Super Typhoon Dolphin hit China?
Alpha Opportunity
Alpha Thesis
Our AI estimates a true probability of 35.0% vs the market's 79.0%, identifying a 44.0% edge on the NO side. Historically, about 40% of super typhoons in the Pacific make landfall in China. This serves as the base rate for the probability of landfall. Super Typhoon Dolphin is currently a Category 5 storm and is projected to move west-northwest, potentially affecting China. However, its exact path remains uncertain.
📐Key Metrics
Key Findings
- Historical Typhoon Landfall Rates — Historically, about 40% of super typhoons in the Pacific make landfall in China. This serves as the base rate for the probability of landfall.
- Current Trajectory and Strength of Dolphin — Super Typhoon Dolphin is currently a Category 5 storm and is projected to move west-northwest, potentially affecting China. However, its exact path remains uncertain.
- Probability Breakdown — The probability of a typhoon forming is high (0.80), but the probability of it reaching super typhoon status and making landfall in China is lower (0.08 combined).
- Updating with Current Evidence — Given the current trajectory and strength, the likelihood of landfall in China is higher than the base rate but still uncertain due to potential changes in path.
- Resolution Criteria — The market resolves 'Yes' if the center of Super Typhoon Dolphin's circulation crosses the coastline of China on or before August 15, 2026, as confirmed by JMA advisories or credible reporting. It resolves 'No' if Dolphin is declared extratropical, dissipated, or absorbed before August 15 without making landfall in China.
- 10 Sources Analyzed — Including Historic Super Typhoon Dolphin hits Category 5 strength in ..., Japan Meteorological Agency｜Tropical Cyclone Information, Super Typhoon DOLPHIN may hit Japan, Taiwan, China
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Alpha Quality Factors
Criteria that determine how exploitable this mispricing is
Human Bias Detected
Cognitive biases creating this alpha opportunity
The market overweights vivid, recent events, making this outcome feel more likely than it actually is.
The crowd may lack specialized knowledge that narrows the true probability range.
Near-expiry markets are susceptible to anchoring on the latest news cycle.