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San Francisco Onion Futures Company

398 points · 179 comments · z-mach9

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Barbing · 1789793003 · focus · HN ↗
> FAQ
>Is this legal?
>Yes, to the best of our knowledge. 7 U.S. Code § 13-1 prohibits "contract[s] for the sale of [...] onions for future delivery [...] on or subject to the rules of any board of trade in the United States." The San Francisco Onion Futures Company is not a board of trade, defined as an "organized exchange or other trading facility". We sell contracts privately to individual buyers, and do not operate any exchange or secondary market.
Performance art against that law?
Also November onions are an absolute steal compared to the adjacent months!
1. hyperhello · 1789793844 · focus · HN ↗
  > The San Francisco Onion Futures Company is not a board of trade, defined as an "organized exchange or other trading facility".
  I hate to argue but then what would they define this as, if not an organized exchange or other trading facility?
  1. quirkot · 1789793988 · focus · HN ↗
    Legal defense is basically "nuh uh"
  2. riffraff · 1789794883 · focus · HN ↗
    I think their point is there's no "peer to peer" trading so it's not an exchange. You're always contracting futures with them, so it's more like a vegetables seller than a trading facility.
    a11ce · 1789795212 · focus · HN ↗
    Exactly right. You're able to privately resell contract keys (and the buyer can then re-issue a new key with their delivery info, voiding the old one), but onionfutures.com doesn't facilitate it.
    altmanaltman · 1789796507 · focus · HN ↗
    I mean, it kind of does, though, no? Since it is backing the contract in the first place? Why else would anyone buy those contracts if they didn't know they have value provided by onionfutures.com in the first place? Why can't I just sell a fake key, claim it'll work, and make unlimited money this way if that wasn't the case?
    The specific laws do not actually ban the transfer of those contracts (tbf this is very complex and depends on your reading). And yes they do not facilitate the trading of the instruments in the secondary market but they absolutely facilitate the instruments themselves otherwise there cannot be a secondary market without any backers of the instruments.
    a11ce · 1789798936 · focus · HN ↗
    See FBT's comment below, it's about being on both sides of the trade.
    sokoloff · 1789832671 · focus · HN ↗
    Between CBOE and OCC, that’s how options trading works as well, and I don’t think anyone claims that CBOE is not an exchange.
  3. FBT · 1789795728 · focus · HN ↗
    7 USC § 1a(37) defines an "organized exchange" as
    > [A] trading facility that— (A) permits trading— (i) by or on behalf of a person that is not an eligible contract participant; or (ii) by persons other than on a principal-to-principal basis; or (B) has adopted (directly or through another nongovernmental entity) rules that— (i) govern the conduct of participants, other than rules that govern the submission of orders or execution of transactions on the trading facility; and (ii) include disciplinary sanctions other than the exclusion of participants from trading.
    And 7 USC § 1a(51)(A) defines a "trading facility" as
    > [A] person or group of persons that constitutes, maintains, or provides a physical or electronic facility or system in which multiple participants have the ability to execute or trade agreements, contracts, or transactions— (i) by accepting bids or offers made by other participants that are open to multiple participants in the facility or system; or (ii) through the interaction of multiple bids or multiple offers within a system with a pre-determined non-discretionary automated trade matching and execution algorithm.
    (7 USC § 1a(51)(B) then follows with some exceptions to that definition.)
    In short—an "organized exchange" is defined as a type of "trading facility". To count as a trading facility", whether of the "organized exchange" type or not, you must either accept bids or offers from other participants yourself or else deterministically match and execute those bids and offers.
  4. lq9AJ8yrfs · 1789858975 · focus · HN ↗
    Broker or dealer. Per the interwebs, a broker acts on behalf of another party, vs a dealer trades for themselves.
    As distinguished from an exchange, where the exchange intermediates and becomes a middle party "simultaneously" to both sides.
    The market dynamics are pretty different between broker dealers and exchanges. For instance a /ticker/ as a concept makes sense only with an exchange.
    The exchanges basically pick up only the contracts or goods with the most volume and standardized & predictable goods.
    To trade more exotic or niche things basically you have to find your own counterparty, versus the exchange acts as an "typical" buyer and seller to each side (assuming there is anyone there at all to participate on each side... giving rise to the concept of market makers who undertake to do just that, i.e., to be ready to trade either side at any time in a certain good).
2. dougSF70 · 1789798805 · focus · HN ↗
  I believe 10/15 is a huge harvest day for Vidalia(??) Onions so crop will be scarce leading up to the harvest. As my multi-player free farming simulator has shown me. <a href="https://farm-mp.frontpageintelligence.ai/" rel="nofollow">https://farm-mp.frontpageintelligence.ai/
  1. conorcleary · 1789817216 · focus · HN ↗
    This is really neat, but, the wages and other costs are way too ballooned to envision as a simulator parallel to 'real life' farming.
    dougSF70 · 1789833005 · focus · HN ↗
    It runs on 250 year epochs so if you join late the costs have inflated quite a bit
    dougSF70 · 1789850927 · focus · HN ↗
    Converting one or two fields to BNG use generates a lot of free cash. Grain trading is also a way of winning. As is converting to solar.
  2. HnUser12 · 1789868574 · focus · HN ↗
    Apparently I cannot join. It says the world is full. Did all of HN join?
    dougSF70 · 1789872213 · focus · HN ↗
    I am increasing the number of farms allowed...try in a couple of minutes
    HnUser12 · 1790030307 · focus · HN ↗
    Just got in. This is interesting! Thank you!
    dougSF70 · 1790053897 · focus · HN ↗
    Learn the ropes and then improve over the next epoch
3. asdfasvea · 1789854789 · focus · HN ↗
  November pumpkins is where the money is.
cwal37 · 1789793067 · focus · HN ↗
For those who don’t know:
<a href="https://en.wikipedia.org/wiki/Onion_Futures_Act" rel="nofollow">https://en.wikipedia.org/wiki/Onion_Futures_Act
(which also banned box office receipt futures)
A fun thing is to go on FRED and make a graph with prices from onions and, say, corn to see the differences in volatility.
1. lukan · 1789803539 · focus · HN ↗
  So this is genuine free market activism?
  1. Avicebron · 1789813986 · focus · HN ↗
    What will the kids think up next?
2. chirau · 1789812062 · focus · HN ↗
  I looked up onions, lettuce and tomatoes (because burgers), and the volatility actually looks very similar. Am I missing something or looking at the wrong things?
  Tomato: <a href="https://fred.stlouisfed.org/series/WPU01130217" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130217 Onion: <a href="https://fred.stlouisfed.org/series/WPU01130216" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130216 Lettuce: <a href="https://fred.stlouisfed.org/series/WPU01130215" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130215
  1. gradus_ad · 1789818672 · focus · HN ↗
    The weather affects all crops
    vishalontheline · 1789821614 · focus · HN ↗
    And the cost of transportation.
    brookst · 1789824972 · focus · HN ↗
    But isn’t the point that futures trading reduces volatility from things like weather?
    hyperhello · 1789825381 · focus · HN ↗
    “Absorbs” volatility might be more accurate.
    brookst · 1789832613 · focus · HN ↗
    I will resist the urge to inquire about the difference between reducing and absorbing.
    collingreen · 1789835609 · focus · HN ↗
    [delayed]
    kennywinker · 1789836496 · focus · HN ↗
    Not a financial expert, but i think reduce implies it goes away, and absorb implies it’s still there but someone is taking it up.
    Like reducing the amount of water on the floor would be turning off the tap. Absorbing the amount of water on the floor is when you mop it up.
    hyperhello · 1789836626 · focus · HN ↗
    That’s exactly what I meant. I was only replying to the question as posed.
    harpiaharpyja · 1789843899 · focus · HN ↗
    Or to bring it back to the original context... Reducing volatility would be reducing the impact of bad weather on your harvest, absorbing volatility is finding someone to cover your losses.
    SR2Z · 1789859529 · focus · HN ↗
    Volatility is a natural consequence of weather, blight, etc., etc.
    To reduce volatility you would need to actually stabilize the supply of onions.
    What futures do is allow traders to shift risk from the future to the present. By pricing that risk, it's possible for people who depend on onions to pay a little more now in exchange for a guarantee about the future.
    It's not magically going to make onions less volatile (although high risk prices can spur investment which might) but it can reduce disruptions caused by volatility.
    The classic example of this is futures on jet fuel which allow airlines to weather random wars in the middle east, OPEC shenanigans, etc. Ticket prices are higher this way, but the existential threat of being forced to cancel a bunch of flights is gone.
    brookst · 1789867530 · focus · HN ↗
    Oh you’re talking supply volatility, where most of us are talking price volatility.
    SR2Z · 1789921569 · focus · HN ↗
    As long as demand remains inelastic, the two are the same.
    If there is a supply shortage prices will rise; no amount of futures trading can create resources out of thin air.
    brudgers · 1789833946 · focus · HN ↗
    [delayed]
    mhh__ · 1789837261 · focus · HN ↗
    many users of derivatives willingly lose money on them because the purpose of these contracts is to transfer risk to those willing to hold it.
    brudgers · 1789837952 · focus · HN ↗
    Money is the thing at risk.
    chadgpt6 · 1789841604 · focus · HN ↗
    Is insurance risking your money?
    brookst · 1789867766 · focus · HN ↗
    Yes of course. I’ve paid for car insurance for 30+ years and have never made a single claim. So far, for me, it’s a bad risk.
    I’ll keep paying though.
    articulatepang · 1789852077 · focus · HN ↗
    People are willing to lose a small but predictable amount of money to avoid occasionally and unpredictably losing a massive amount of money. The former is a loss they can plan for and absorb. The latter might kill their business.
    Traders are often happy to take the other side of that trade because they can trade against many counterparties, collect a small premium from each one, and try to ensure their counterparties won’t all fail in a correlated way.
    brudgers · 1789860878 · focus · HN ↗
    [delayed]
    brookst · 1789867712 · focus · HN ↗
    The thing you’re missing:
    Would you rather have net profits of 20, -10, 15, -5, -10, 25, -5 year over year, or profits of 4, 4, 4, 5, 4, 5, 5?
    brudgers · 1789868659 · focus · HN ↗
    [delayed]
    brookst · 1789909961 · focus · HN ↗
    Did you reply to the wrong comment? I said nothing of the sort.
    Your hung up on money, everyone is trying to explain that the exact same money is better when it is predictable versus erratic.
    brudgers · 1789931174 · focus · HN ↗
    [delayed]
    mhh__ · 1789947767 · focus · HN ↗
    You may have liabilities or income that exist outside of financial markets e.g. if I have 500t of wheat due to be harvested I might want to hedge enough to guarantee I can pay my staff - ive locked in the price of wheat, I might make less money as a result but my risk is lower.
    brudgers · 1790037956 · focus · HN ↗
    [delayed]
    mpmpmpmp · 1789863078 · focus · HN ↗
    For speculators yes. But for a farmer and the consumer of the goods they would rather lock in a margin for their goods and run their business than risk guessing what the price will be at harvest time or consumption time. It’s called hedging.
    brudgers · 1790028292 · focus · HN ↗
    [delayed]
    quickthrowman · 1789836412 · focus · HN ↗
    That’s what crop insurance is for. Futures trading lets you lock in a price now for crops that will be harvested later. You still need to deliver crops if you sell a futures contract and you’ll be responsible to deliver even if weather reduces your harvest.
    quickthrowman · 1789836675 · focus · HN ↗
    Futures are a mechanism to transfer risk from one party to another, more or less.
    brookst · 1789910221 · focus · HN ↗
    To reduce net risk for both parties, at the expense of also reducing chances of windfalls.
    To the farmer, futures mean no risk of having to sell when prices are low. To the buyer, futures mean no risk of having to buy when prices are high.
    The farmer also gives up the chance of selling when prices are high, and the buyer gives up the chance of buying when prices are low.
    The transfers go both ways, which is the magic.
    quickthrowman · 1789941624 · focus · HN ↗
    You’re leaving out the speculators who usually end up assuming the risk of both the producer and buyer.
  2. bz_bz_bz · 1789832909 · focus · HN ↗
    None of the products you’ve chosen have a substantial futures market, which is why the person you responded to chose corn to make their point.
  3. repiret · 1789846166 · focus · HN ↗
    Lettuce and Tomatoes don't keep well, which adds more seasonal variability and reduces the ability of a futures market to smooth prices.
    Compare with potatoes, which keep about as well an onions, and are farmed in the same areas. Look at onions and potatoes over a 5-year time span (because the default all-data time span is silly for this). It doesn't give enough control of the Y axis to make the comparison easy - for potatoes it shows me Y=40-320, for a range of 280; for onions it shows me Y=120-440, for a range of 320. This means that potatoes are more "zoomed in" and it's graph will exaggerate volatility relative to onions, but qualitatively, I'd say the potato graph looks smother just the same. This is exactly what economic theory says a futures market should do to the price.
    stymaar · 1789846667 · focus · HN ↗
    > Lettuce and Tomatoes don't keep well, which adds more seasonal variability
    The more durable a produce is, the easier it is to transport over a large area, which will always smoothen price fluctuations. This alone could explain why lettuce and tomatoes have higher volatility than onions, which have higher volatility than potatoes, which have higher volatility than corn and weat.
    repiret · 1789885913 · focus · HN ↗
    I assert that onions and potatoes have roughly the same durability and ease of transport.
    stymaar · 1789889590 · focus · HN ↗
    I know nothing about logistics of the food supply chain and how they preserve food at scale, but at least at home I'd say that potatoes are close to twice as durable as onions.
3. mauvehaus · 1789821342 · focus · HN ↗
  This has to have been the inspiration for Milo Minderbinder cornering the cotton market in Catch-22, right?
4. samaltman2 · 1789823341 · focus · HN ↗
  Interesting. This would be more sensible if it was time-bound. Since the intention was clearly "stop a bad thing someone is doing right now" and not "make this field illegal forever"
5. echelon · 1789838793 · focus · HN ↗
  The box office receipts ban is hilarious.
  I suppose that prevents Kalshi gambling on box office duds?
not-my-account · 1789793203 · focus · HN ↗
These onion prices are quite high! The novelty probably drives up prices. Too bad there isn’t a liquid market for onions
1. bowmessage · 1789794614 · focus · HN ↗
  Onion soup sounds highly fungible.
  1. SwellJoe · 1789800434 · focus · HN ↗
    [delayed]
    chadgpt6 · 1789841848 · focus · HN ↗
    If you do not yet put in mushrooms it is fungible. If you put in mushrooms it is no longer fungible as it has already been fungid.
  2. [deleted] · 1789810973 · focus · HN ↗
    [deleted]
leej111 · 1789793456 · focus · HN ↗
[dead]
theogravity · 1789793539 · focus · HN ↗
How many onions / lbs does a contract represent?
1. shoo · 1789794242 · focus · HN ↗
  Pricing is per onion. You could order some and weigh them, and report back.
2. pjscott · 1789794574 · focus · HN ↗
  A contract represents a set of (quantity, month) tuples, where quantity is an integer greater than zero; that number of yellow onions will be delivered in the first week of the corresponding month to the current holder of the contract. The mass of each onion is unspecified, as is the mean and variance of the underlying onion-mass distribution from which they are drawn.
wocram · 1789793647 · focus · HN ↗
These are 1 onion contracts? Outrageous!
1. K0balt · 1789798290 · focus · HN ↗
  I know, right! Way overvalued. I’m shorting onions.
yieldcrv · 1789794255 · focus · HN ↗
hell yeah, based
ElProlactin · 1789794264 · focus · HN ↗
Can we tokenize this?
1. a11ce · 1789798559 · focus · HN ↗
  Go for it, <a href="https://a11ce.com/#contact" rel="nofollow">https://a11ce.com/#contact if you want to coordinate on any sort of derivatives
joegibbs · 1789794613 · focus · HN ↗
Why was the law against onion futures passed in the first place? Couldn’t the same scheme be done with garlic, or sweet potatoes, or turnips or something?
1. chirau · 1789794683 · focus · HN ↗
  Because Vincent Kosuga.
2. gostsamo · 1789796046 · focus · HN ↗
  A guy cornered the market in the fifties, caused a scandal, they made a special exception.
  1. shawn_w · 1789799078 · focus · HN ↗
    Two guys. At one point bags of onions were being sold for less than the value of the bags they were in...
  2. joegibbs · 1789799957 · focus · HN ↗
    But what I’m saying is, why did they only cover onions? I don’t think there’s anything stopping someone from cornering the market in other commodities just as easily
    weakened_malloc · 1789801854 · focus · HN ↗
    Because the size of the market was/is so small that you're actually able to corner it. Oil or Treasury futures are far too big that no single person could ever corner it.
    microtherion · 1789805015 · focus · HN ↗
    Though the Hunt brothers made a pretty good run at the Silver market in 1980.
    defrost · 1789805359 · focus · HN ↗
    China went all in on rare earth concentrate processing, taking the environmental hits that no one else wanted to touch.
    That paid off in a concentrated lock on the bulk of rare earth applications.
    mhh__ · 1789831205 · focus · HN ↗
    > Treasury futures are far too big that no single person could ever corner it.
    Well, you'd think, but squeezing the CTD bond was completely accepted practice well into the noughties until PIMCO flew too close to the sun and faced regulatory wrath.
    baobabKoodaa · 1789838621 · focus · HN ↗
    There are many other small markets as well, and yet, this law is not called the "Don't Corner Small Markets Act".
    chadgpt6 · 1789841758 · focus · HN ↗
    This came from the times when Congress wasn't deadlocked. If someone cornered a different small market they could make another law against that.
    baobabKoodaa · 1789842893 · focus · HN ↗
    The point is that it's silly that the law is specific to onions, and the explanation "it's because onion market was small enough to be cornered" is unsatisfactory because there are other small markets too
    manquer · 1789863595 · focus · HN ↗
    [delayed]
    IAmBroom · 1790079241 · focus · HN ↗
    The law actually addressed public outcry, not regulatory malfeasance in a broader sense.
    And therefore, yes, it was a silly, political reaction.
3. pjc50 · 1789803229 · focus · HN ↗
  Because American lawmakers are weirdly specific brainless creatures. This is how you get all those laws named after individuals like Megan, and my other specific fave, the Video Rental Records Privacy Act.
  Shall we address the general question of privacy, or just close the particular breach that affected a congressman? You know it's going to be the latter.
  1. QuadmasterXLII · 1789822072 · focus · HN ↗
    narrowly scoped laws limit the blast radius of a stupid law without the political price of opposing a law in the aftermath of a disaster that law would have prevented. imagine if they had banned commodities trading in general!
  2. specialist · 1789826738 · focus · HN ↗
    > weirdly specific brainless creatures
    Legislative product management, by committee.
  3. howunfortunate · 1789827744 · focus · HN ↗
    This one is a great example of how a Republic can avoid the worst excesses of direct Democracy
    A direct democracy might have just banned all futures.
  4. zugi · 1789841014 · focus · HN ↗
    The particular brainless lawmaker behind this act went on to become President. I think that shows Americans love and reward brainless lawmakers for creating these brainless laws.
    joecool1029 · 1789855520 · focus · HN ↗
    To be fair it’s probably important to note he was never elected president…
    bananamogul · 1789875413 · focus · HN ↗
    Wikipedia says it was Patrick Leahy who introduced it. He was never president.
    And it was Robert Bork - who was never elected to anything - that inspired it.
    And Bork’s rental history really should have been private. In any event, it was innocuous,
    What am I missing in this story?
    <a href="https://en.wikipedia.org/wiki/Video_Privacy_Protection_Act" rel="nofollow">https://en.wikipedia.org/wiki/Video_Privacy_Protection_Act
    <a href="https://en.wikipedia.org/wiki/Bork_tapes" rel="nofollow">https://en.wikipedia.org/wiki/Bork_tapes
    stockresearcher · 1789891893 · focus · HN ↗
    I'm pretty sure that he was loved and rewarded for being the star football player at the University of Michigan when they were the undefeated national champions two years in a row.
  5. jubilanti · 1789842004 · focus · HN ↗
    No, it is because onions (and potatoes) occupy this very weird middle ground in terms of perishability, the seasonality of the harvest, and the size of the domestic production and consumption market, which makes them uniquely vulnerable to market manipulation. A commodity has to be storable enough and/or regularly harvested enough to create a predictable futures market, but when inventory is small, highly seasonal, geographically constrained, and slowly and often unpredictably non-linearly degrading, then it's pretty easy for a big player to squeeze the market.
    It is a lot harder to corner the market when you have very non-perishable or very perishable goods and/or much larger domestic and global markets with harvests that vary across geography and time, like wheat and frozen orange juice concentrate. Most goods traded via futures have those properties. Onions is right on the edge of even making sense as a futures commodity, and because of that, it's a recipe for manipulation.
    And there were calls to regulate potatoes the same way in the fallout of the onion market manipulation, but those didn't pass, and in 1976 the potato market was almost cornered in the same way.
    But sure, govment bad.
  6. hristov · 1789847702 · focus · HN ↗
    I would not be so quick to call people brainless. Generally speaking, I would prefer that congressmen be specific with their legislation and, like a good doctor, try to first do no harm or as little harm as possible and address the problem before them specifically without causing unintended consequences.
    As I wrote in a previous comment on this thread I am sure the congressman that passed the law discussed the issue with farmers and ranchers producing all traded commodities and the ones that were not growing onions did not think there was a significant risk of a corner and they preferred to have their goods traded.
    Although I do agree with you that privacy protections should be broader. As far as Megan’s law I am sure you realize that it is intended to protect everyone from sex criminals not just people named Megan.
4. altairprime · 1789841346 · focus · HN ↗
  [delayed]
5. hristov · 1789846930 · focus · HN ↗
  No because none of these things have futures traded on a major exchange. Agricultural commodities whose futures are traded on major exchanges are very few. Now of course your question will be couldn’t the same be done with a commodity whose futures are traded, such as corn or wheat.
  The answer is it is difficult to say. One thing anyone cornering the market has to consider is government intervention. In this respect onions are perfect. They are merely a condiment. Nobody is going to starve for lack of onions if the rest of the food supply is intact. Thus any government official rushing in to intervene in a cornering of the onion market will look a little foolish and thus think twice about it.
  If someone tried to corner the wheat market the government is likely to step in, confiscate his goods and pay him a fair price for his wheat which will be much lower than the cornered price. The cornerer will then lose money.
  I suspect the congressman that passed the legislation did his research and talked to all potentially affected parties. I suspect the farmers and ranchers producing the other traded commodities said that this was not really a concern for them and that they would prefer that their commodities continue to be traded.
  1. rafterydj · 1789867331 · focus · HN ↗
    Wait a minute, are onions just condiments to people? You can cook a ton of different dishes with onions, I was thinking about the many recipes I've tried for onion soup.
mimorigasaka · 1789794644 · focus · HN ↗
The people behind this are a real (if silly) student organization at UChicago and Northwestern campaigning for the legalization of onion futures trading. Sometimes they will aggressively hand out free onions to passerby on campus. It's quite entertaining.
They have a website also: <a href="https://onionfutures.org" rel="nofollow">https://onionfutures.org
1. a11ce · 1789795104 · focus · HN ↗
  Hi! I'm the proprietor of onionfutures.com. I'm actually not a member of UChicago for Our Futures and came up with the idea independently, but we've since connected and they handle our Chicago deliveries.
  1. what · 1789796117 · focus · HN ↗
    Are you really charging $9/onion? I get upset when Safeway charges $2/lb when I can get onions for a quarter that price.
    luma · 1789796933 · focus · HN ↗
    Priced to what the market can bear
    IncreasePosts · 1789797808 · focus · HN ↗
    Maybe it's a really big onion
    bryanrasmussen · 1789802697 · focus · HN ↗
    maybe it tastes more oniony than most onions, these onions are the essential onions of which other onions are mere shadows.
    dcuthbertson · 1789808065 · focus · HN ↗
    It's the mischief caused by shadow onions lurking in dark corners of the market bins that make me cry.
    js2 · 1789832493 · focus · HN ↗
    [delayed]
    a11ce · 1789799187 · focus · HN ↗
    Yes, it's primarily a novelty/art thing. But I do actually deliver the onions. Prices vary.
    rsync · 1789850644 · focus · HN ↗
    "Yes, it's primarily a novelty/art thing."
    If you're going to do this with your life you have to believe that you're necessary - and you are - everyone wants to drive their fancy cars and their big fucking houses they can't afford they need you - you're necessary.
    The only reason any of this works is (you) have (your) hand on the scale in their favor. (You) take it away, everything gets really fucking fair, really fucking fast - and don't no one want that.
    They want all of the things (you) have to give them and .... then they want to pretend they don't know where it came from.
    dgellow · 1789815371 · focus · HN ↗
    “We are selling to willing buyers at the current fair market price”
    <a href="https://youtu.be/wYlptbR0Dkw" rel="nofollow">https://youtu.be/wYlptbR0Dkw
    doughecka · 1789819131 · focus · HN ↗
    I read that in his voice.
    sklargh · 1789839380 · focus · HN ↗
    I give the scene to really junior people as the most realistic depiction of how to survive hammered in a late night high stakes meeting.
    divbzero · 1789832527 · focus · HN ↗
    [delayed]
  2. teaearlgraycold · 1789797969 · focus · HN ↗
    I can confirm this person is the owner of onionfutures.com
    mcint · 1789810465 · focus · HN ↗
    I can confirm this person can confirm a11ce is the owner of onionfutures.com
    jeffrallen · 1789820790 · focus · HN ↗
    I can confirm that these people are silly.
    brookst · 1789824860 · focus · HN ↗
    [citation needed]
    [deleted] · 1789826088 · focus · HN ↗
    [deleted]
  3. Drupon · 1789798463 · focus · HN ↗
    If you are indeed charging 9 dollahz a fakin onion, then let me be the first to tell you:
    "FUCK YOU"
    and your community will follow. Fuck you, burn your whole shit to the ground, dork.
2. Drupon · 1789798356 · focus · HN ↗
  I'm a young naive lad curious about this, have UChicago economics professors and/or grad students ever done something that might be considered like, idk, a crime against humanity stain on one's soul, in the past couple of decades?
3. hristov · 1789845702 · focus · HN ↗
  They are not that silly. I am sure they are being secretly funded by the cbot. The idea may seem silly but apparently onion futures trading was big money when it was banned. It was the most lucrative futures contract for the cbot (Chicago board of trade).
shoo · 1789794691 · focus · HN ↗
US Department of Agriculture publishes a national potato & onion report:
<a href="https://www.ams.usda.gov/mnreports/fvdidnop.pdf" rel="nofollow">https://www.ams.usda.gov/mnreports/fvdidnop.pdf
Readers may wish to skip ahead to page 4, where onions are discussed.
1. boscillator · 1789849935 · focus · HN ↗
  They have what appears to be a screenshot of an excel document (complete with sort and filter widgets), except I can select the text, so perhaps it's an embedded excel sheet inside a word doc?
  Either way, I love it and I'm always excited to learn about what mundane functions the government and MS Office are keeping alive for society.
chirau · 1789794775 · focus · HN ↗
In an onion related note... is the "I sell onions on the internet" guy still around? I believe he was selling Vidalia onions.
1. protastus · 1789795672 · focus · HN ↗
  It appears so! <a href="https://www.vidaliaonions.com/" rel="nofollow">https://www.vidaliaonions.com/
  I bought a box of onions from him before and they were very good. I ate those onions for a long time.
  1. ramesh31 · 1789824754 · focus · HN ↗
    Holy crap those are some expensive onions
  2. eightturn · 1789835874 · focus · HN ↗
    peter here... sincerely appreciate your business.
2. eightturn · 1789835712 · focus · HN ↗
  I'm still here : ) just finished up year 11.
haakon · 1789795121 · focus · HN ↗
Since this may be a legal gray area, they should host it on a Tor onion site.
1. thedrexster · 1789799417 · focus · HN ↗
  oooo, that's a missed opportunity
charcircuit · 1789795408 · focus · HN ↗
>and for hedging risks associated with weather and market fluctuations
Why don't existing futures cover this? Are onions unique in how sturdy they are? You can use derivatives of the weather itself even.
1. tesseract · 1789800792 · focus · HN ↗
  Because, specifically for onions, it's infamously illegal in the US (as the site alludes to).
  1. charcircuit · 1789836199 · focus · HN ↗
    It's not illegal for onion farmers to buy weather futures.
Reason077 · 1789795553 · focus · HN ↗
Are these contract prices really "per onion"? Or are they actually per pound or per kg? Up to $9.39 seems very expensive if it's really the price for a single onion.
I thought maybe they're some sort of special exotic onion variety, but I don't see anything to suggest that.
1. a11ce · 1789795633 · focus · HN ↗
  They are per (normal (sometimes organic) yellow) onion. Prices vary.
  (It's primarily a novelty/art thing. But I do actually deliver the onions.)
  1. viccis · 1789798542 · focus · HN ↗
    (Fuck (you))
  2. kolinko · 1789804169 · focus · HN ↗
    Love it, reminds me of early days of crypto.
    How do you decide upon a price?
    conorcleary · 1789817267 · focus · HN ↗
    the pizza to onion ratio of course
    a11ce · 1789836627 · focus · HN ↗
    I don't want to give too many details, but I will say if you graph prices over time it looks a lot like a market price. Maybe I should add a price history page to demonstrate that it's not noise...
    mhh__ · 1789838220 · focus · HN ↗
    All you need to do is quite a price that isn't vulnerable to arbitrage. As a dealer you should then charge a spread atop of that to cover make a profit after costs and adverse selection (even if trading was free you should charge a spread to protect you against informed traders)
z-mach9 · 1789796623 · focus · HN ↗
Looking forward to my 2 onions in November! Anyone have some good recipes?
1. alehrs · 1789797355 · focus · HN ↗
  Search for italian “soffritto” and “ragù alla bolognese”
2. viccis · 1789798607 · focus · HN ↗
  If you don't know how to use "onions" then google "how to cook" and see where it takes you
3. janfoeh · 1789816673 · focus · HN ↗
  French onion soup [0]
  Some personal preference not covered in that recipe: do not caramelise all your onion; instead, keep a quarter and add it in after you have caramelised the rest. This gives a bit more variety in terms of taste and texture.
  Few things warm your cockles this satisfyingly on a wet, dreary late-Autumn evening.
  [0] <a href="https://www.seriouseats.com/french-onion-soup-recipe" rel="nofollow">https://www.seriouseats.com/french-onion-soup-recipe
4. astura · 1789831556 · focus · HN ↗
  7 onion soup is a favorite of mine. I'm vegetarian so I omit the bacon and use veggie broth.
  <a href="https://www.emerils.com/127311/seven-onion-soup-parmesan-garlic-bread" rel="nofollow">https://www.emerils.com/127311/seven-onion-soup-parmesan-gar...
briansm · 1789797577 · focus · HN ↗
The Future's Bright. The Future's Onion.
dougSF70 · 1789798644 · focus · HN ↗
This is very good.
rich_sasha · 1789799025 · focus · HN ↗
I get that it’s a joke, since onion futures are illegal. But isn’t trading all futures regulated?
1. csande17 · 1789802788 · focus · HN ↗
  You're not really trading a future, you're just pre-ordering onions.
2. avarun · 1789861382 · focus · HN ↗
  [delayed]
retube · 1789799158 · focus · HN ↗
These are not forwards, not futures.
1. a11ce · 1789800802 · focus · HN ↗
  Yeah, this is pretty much the loophole. They're never actually referred to as futures, but as "private, transferable contracts for the future physical delivery of yellow onions".
  1. mhh__ · 1789837124 · focus · HN ↗
    Other than the name of the business
envoked · 1789800841 · focus · HN ↗
For those unfamiliar, there's an excellent Planet Money episode on how trading onion futures got banned in the 50s.
<a href="https://www.npr.org/sections/money/2015/10/14/448718171/episode-657-the-tale-of-the-onion-king" rel="nofollow">https://www.npr.org/sections/money/2015/10/14/448718171/epis...
wheybags · 1789807297 · focus · HN ↗
Someone at the onion needs to see this.
gorgoiler · 1789809748 · focus · HN ↗
[delayed]
1. Barbing · 1789834207 · focus · HN ↗
  You could do standup probably
onion2k · 1789810054 · focus · HN ↗
I'll take 2000 please.
stevefan1999 · 1789812355 · focus · HN ↗
> Let the free market reign supreme.
Tsk. There is no free market.
PowerElectronix · 1789813096 · focus · HN ↗
I can't wait until someone tries to corner the market, holds a shitton of future onions, the onions go bad and the market implodes showing that future contracts on perishable items is generally a bad idea.
1. dnautics · 1789814507 · focus · HN ↗
  Future contracts on perishable items are executed all the time.
2. chadgpt6 · 1789841928 · focus · HN ↗
  That's half the reason we have futures contracts. If they were only on nonperishable goods you could just buy the goods and store them in a warehouse.
PowerElectronix · 1789813727 · focus · HN ↗
I can't short onion futures? Why? Buying the nov. Contract and selling the dec. Would net a >100% return on a month (minus the freezing cost of the onions)
1. wavemode · 1789827777 · focus · HN ↗
  You can, since the contracts are transferrable. But SFOFC is not an exchange so you'd have to find a buyer yourself.
monkeydust · 1789817361 · focus · HN ↗
> Please note that although we will do our best to contact you and deliver your onions, no refunds are offered even in the case of a failed delivery.
How many times have you failed delivery where you have been able to establish contact with contract owner and they want their onions? Curious
1. a11ce · 1789836829 · focus · HN ↗
  A few people have ghosted me after establishing contact. I think some people think it's not worth the coordination effort or didn't expect it to be real in the first place.
cushychicken · 1789820762 · focus · HN ↗
Someone call Peter Askew, the vidalia onion guy!
www.onions.com
1. eightturn · 1789821506 · focus · HN ↗
  haha : )
padjo · 1789823022 · focus · HN ↗
It's an onion Michael, how much could it cost, $9.41?
theturtle · 1789826746 · focus · HN ↗
[dead]
mrbluecoat · 1789830620 · focus · HN ↗
> How are prices determined? ... using a proprietary algorithm.
How is this article HN newsworthy?
1. Stitch4223 · 1789841551 · focus · HN ↗
  For various reasons.
  From what I get from it, it describes a complex technical + social system that has been exploited to the max leading to insane pricing, risks and a ban. They want to do that again it seems.
  That this specific algorithm isn’t revealed is the joke: it’s a complete fraud, their secret uber elite algorithm will favor nobody except the owners obviously.
  It’s super nerdy and it took some effort, at least for me, to understand the fun.
  I might have completely missed the mark as everything about this subject, such as the Wikipedia article and so on are completely new to me.
mhh__ · 1789831038 · focus · HN ↗
Is the price of onions really that seasonal? Shall have to check
jordan1212k · 1789831746 · focus · HN ↗
This is a rip-off. I live in NYC and these prices are 2x to 4x what I pay for organic onions.
1. ivraatiems · 1789831875 · focus · HN ↗
  These aren't onions, these are onion futures! You can buy a physical onion now for one price, but you can't buy the promise of an onion later!
ivraatiems · 1789831937 · focus · HN ↗
Okay folks, I've got one onion for November. Charged $3.74, yours for $4.50! But hurry! By November it could be worth $9!
I am serious, reply here, I'll sell you my onion contract for $4.50. Who's buying?
1. [deleted] · 1789837221 · focus · HN ↗
  [deleted]
solaarphunk · 1789836476 · focus · HN ↗
I see a future for a bananacoin collab
BigTTYGothGF · 1789839047 · focus · HN ↗
We as a society seem to have done OK without onion futures for these past 70 years, makes you wonder what other futures trading we could do without.
kotaKat · 1789841058 · focus · HN ↗
I would like the ability to:
1: have a QR code to 'claim' a key (eg, so I can print the future out onto a card and hand it to someone) and
2: have the QR code allow me to claim multiple keys at once (eg, to allow me to sell multiple onions in one QR coded 'bag' of keys).
Getting some ideas on how to sell some onions locally.
1. a11ce · 1789885388 · focus · HN ↗
  good idea, will add it this week. probably it will be part of the manage page, where after you enter one or more keys you can create a QR code that links to a manage page with the key(s) prefilled
  1. kotaKat · 1789899082 · focus · HN ↗
    i cannot wait to give people the gift of onion futures.
WhatsTheBigIdea · 1789845715 · focus · HN ↗
I'm down to buy some onions. But the interface lacks units. Are these big onions or small onions? Typically, I buy onions by the pound here in San Francisco.
tomcam · 1789846618 · focus · HN ↗
At last, the final piece of my retirement portfolio drops neatly into place
1. owencmcgrath · 1789851024 · focus · HN ↗
  a random walk down wall street never said anything about onion futures!
hbarka · 1789853677 · focus · HN ↗
Can you add olive oil, coffee beans, and firewood?
Tossrock · 1789854956 · focus · HN ↗
Laying the groundwork for The Onion Knight, no doubt: <a href="https://www.astralcodexten.com/p/the-onion-knight" rel="nofollow">https://www.astralcodexten.com/p/the-onion-knight

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